10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2006

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 1-11071

UGI CORPORATION

(Exact name of registrant as specified in its charter)

Pennsylvania	23-2668356
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

UGI CORPORATION

460 North Gulph Road, King of Prussia, PA

(Address of principal executive offices)

19406

(Zip Code)

(610) 337-1000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  x            Accelerated filer  ¨            Non-accelerated filer  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ¨    No  x

At July 31, 2006, there were 105,413,596 shares of UGI Corporation Common Stock, without par value, outstanding.

UGI CORPORATION AND SUBSIDIARIES

TABLE OF CONTENTS

		PAGES
Part I Financial Information
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of June 30, 2006, September 30, 2005 and June 30, 2005	1
	Condensed Consolidated Statements of Income for the three and nine months ended June 30, 2006 and 2005	2
	Condensed Consolidated Statements of Cash Flows for the nine months ended June 30, 2006 and 2005	3
	Notes to Condensed Consolidated Financial Statements	4 -22
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23 -38
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38 - 41
Item 4.	Controls and Procedures	42
Part II Other Information
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 6.	Exhibits	44 - 45
Signatures		46

-i-

UGI CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(Millions of dollars)

	June 30, 2006			September 30, 2005			June 30, 2005
ASSETS
Current assets:
Cash and cash equivalents	$	292.6		$	315.0		$	207.4
Short-term investments (at cost, which approximates fair value)		115.0			70.0			65.0
Accounts receivable (less allowances for doubtful accounts of $37.5, $29.2 and $33.0, respectively)		421.6			421.8			424.3
Accrued utility revenues		12.2			10.4			8.5
Inventories		217.2			239.9			168.8
Deferred income taxes		31.4			24.4			39.6
Derivative financial instruments		22.8			60.3			7.2
Prepaid expenses		14.7			26.2			15.8
Other current assets		5.2			4.3			7.6
Total current assets		1,132.7			1,172.3			944.2
Property, plant and equipment, at cost (less accumulated depreciation and amortization of $1,065.4, $986.9 and $966.7, respectively)		1,832.2			1,802.7			1,787.3
Goodwill		1,240.9			1,231.2			1,233.9
Intangible assets (less accumulated amortization of $59.2, $45.4 and $41.4, respectively)		168.1			172.6			176.4
Utility regulatory assets		61.3			61.3			66.8
Investments in equity investees		57.7			12.8			13.5
Other assets		124.8			118.6			106.6
Total assets	$	4,617.7		$	4,571.5		$	4,328.7
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	78.6		$	252.0		$	208.7
AmeriGas Propane bank loans		—			—			15.0
UGI Utilities bank loans		112.1			81.2			49.5
Other bank loans		15.1			16.2			16.5
Accounts payable		306.4			399.7			276.8
Deferred fuel refunds		10.1			17.4			19.1
Employee compensation and benefits accrued		69.0			78.6			87.3
Dividends and interest accrued		14.7			40.8			31.1
Income taxes accrued		18.9			40.1			69.3
Deposits and advances		77.9			124.1			58.0
Other current liabilities		93.1			113.0			99.8
Total current liabilities		795.9			1,163.1			931.1
Long-term debt		1,642.7			1,392.5			1,458.6
Deferred income taxes		496.3			477.5			468.9
Other noncurrent liabilities		339.8			334.5			324.1
Total liabilities		3,274.7			3,367.6			3,182.7
Commitments and contingencies (note 8)
Minority interests		201.3			206.3			166.7
Common stockholders’ equity:
Common Stock, without par value (authorized - 300,000,000 shares; issued - 115,152,994 shares)		805.1			793.6			769.9
Retained earnings		392.6			266.3			292.6
Accumulated other comprehensive income (loss)		18.6			16.5			(1.6	)
		1,216.3			1,076.4			1,060.9
Treasury stock, at cost		(74.6	)		(78.8	)		(81.6	)
Total common stockholders’ equity		1,141.7			997.6			979.3
Total liabilities and stockholders’ equity	$	4,617.7		$	4,571.5		$	4,328.7

See accompanying notes to condensed consolidated financial statements.

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UGI CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

(Millions of dollars, except per share amounts)

	Three Months Ended June 30,						Nine Months Ended June 30,
	2006			2005			2006			2005
Revenues	$	919.1		$	932.5		$	4,342.5		$	4,082.6
Costs and expenses:
Cost of sales		611.6			628.8			3,059.3			2,764.6
Operating and administrative expenses		236.2			233.6			735.9			736.7
Utility taxes other than income taxes		3.2			3.2			10.2			10.1
Depreciation and amortization		36.5			36.5			108.7			111.8
Other income, net		(6.9	)		(7.2	)		(32.9	)		(40.9	)
		880.6			894.9			3,881.2			3,582.3
Operating income		38.5			37.6			461.3			500.3
Loss from equity investees		—			(0.7	)		(1.2	)		(2.0	)
Interest expense		(29.1	)		(32.1	)		(92.1	)		(98.9	)
Loss on early extinguishments of debt		—			(33.6	)		(18.5	)		(33.6	)
Income (loss) before income taxes and minority interests		9.4			(28.8	)		349.5			365.8
Income tax (expense) benefit		(2.1	)		1.6			(105.0	)		(123.9	)
Minority interests, principally in AmeriGas Partners		11.4			27.9			(64.3	)		(45.7	)
Net income	$	18.7		$	0.7		$	180.2		$	196.2
Earnings per common share:
Basic	$	0.18		$	0.01		$	1.71		$	1.89
Diluted	$	0.18		$	0.01		$	1.69		$	1.86
Average common shares outstanding (millions):
Basic		105.603			104.312			105.374			103.542
Diluted		106.850			106.024			106.585			105.422
Dividends declared per common share	$	0.1763		$	0.1688		$	0.5138		$	0.4813

See accompanying notes to condensed consolidated financial statements.

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UGI CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(Millions of dollars)

	Nine Months Ended June 30,
	2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	180.2		$	196.2
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization		108.7			111.8
Provision for uncollectible accounts		21.3			19.8
Minority interests		64.3			45.7
Deferred income taxes, net		6.4			7.2
Loss on early extinguishments of debt		18.5			33.6
Net change in settled accumulated other comprehensive income		(17.7	)		(3.9	)
Other, net		22.7			(3.8	)
Net change in:
Accounts receivable and accrued utility revenues		26.3			(76.1	)
Inventories		24.4			41.8
Deferred fuel costs		(18.0	)		11.2
Accounts payable		(134.3	)		(57.3	)
Other current assets and liabilities		(109.8	)		(9.5	)
Net cash provided by operating activities		193.0			316.7
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property, plant and equipment		(132.8	)		(112.0	)
Net proceeds from disposals of assets		7.4			14.1
Net proceeds from sale of Energy Ventures		17.7			—
Investment in Flaga joint venture		(10.1	)		—
Acquisitions of businesses, net of cash acquired		(3.5	)		(31.7	)
Short-term investments increase		(45.0	)		(15.0	)
Other, net		0.7			6.6
Net cash used by investing activities		(165.6	)		(138.0	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends on UGI Common Stock		(54.1	)		(49.9	)
Distributions on AmeriGas Partners publicly held Common Units		(54.9	)		(49.7	)
Issuances of debt including bank loans with maturities greater than three months		863.4			506.0
Repayments of debt including bank loans with maturities greater than three months		(897.4	)		(526.2	)
AmeriGas Propane bank loans increase		—			15.0
Other bank loans decrease		(2.1	)		(0.3	)
Increase (decrease) in UGI Utilities bank loans with maturities of three months or less		80.9			(11.4	)
Redemption of UGI Utilities preferred shares subject to mandatory redemption		—			(20.0	)
Issuance of UGI Common Stock		9.3			22.8
Net cash used by financing activities		(54.9	)		(113.7	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		5.1			(7.2	)
Cash and cash equivalents (decrease) increase	$	(22.4	)	$	57.8
Cash and cash equivalents:
End of period	$	292.6		$	207.4
Beginning of period		315.0			149.6
(Decrease) increase	$	(22.4	)	$	57.8

See accompanying notes to condensed consolidated financial statements.

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UGI CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

(Millions of dollars and euros, except per share amounts)

1. Basis of Presentation

UGI Corporation (“UGI”) is a holding company that owns and operates natural gas and electric distribution utility, electricity generation, retail propane distribution, energy marketing and related businesses in the United States. Through foreign subsidiaries and joint-venture affiliates, UGI also distributes liquefied petroleum gases (“LPG”) in France, central and eastern Europe and China.

We conduct a national propane distribution business through AmeriGas Partners, L.P. (“AmeriGas Partners”) and its principal operating subsidiaries AmeriGas Propane, L.P. (“AmeriGas OLP”) and AmeriGas OLP’s subsidiary, AmeriGas Eagle Propane, L.P. (“Eagle OLP”). AmeriGas Partners, AmeriGas OLP and Eagle OLP are Delaware limited partnerships. UGI’s wholly owned second-tier subsidiary AmeriGas Propane, Inc. (the “General Partner”) serves as the general partner of AmeriGas Partners and AmeriGas OLP. AmeriGas OLP and Eagle OLP (collectively referred to as the “Operating Partnerships”) comprise the largest retail propane distribution business in the United States serving residential, commercial, industrial, motor fuel and agricultural customers from locations in 46 states. We refer to AmeriGas Partners and its subsidiaries together as the “Partnership” and the General Partner and its subsidiaries, including the Partnership, as “AmeriGas Propane.” At June 30, 2006, the General Partner and its wholly owned subsidiary Petrolane Incorporated (“Petrolane”) collectively held a 1% general partner interest and a 42.7% limited partner interest in AmeriGas Partners, and effective 44.3% ownership interests in AmeriGas OLP and Eagle OLP. Our limited partnership interest in AmeriGas Partners comprises 24,525,004 Common Units. The remaining 56.3% interest in AmeriGas Partners comprises 32,272,101 publicly held Common Units representing limited partner interests.

Our wholly owned subsidiary, UGI Enterprises, Inc. (“Enterprises”) (1) owns and operates LPG distribution businesses in France (“Antargaz”); (2) owns and operates LPG distribution businesses and participates in a LPG joint-venture business in central and eastern Europe (collectively, “Flaga”); and (3) participates in a propane joint-venture business in China. We refer to our foreign operations collectively as “International Propane.”

Our natural gas and electric distribution utility businesses are conducted through our wholly owned subsidiary, UGI Utilities, Inc. (“UGI Utilities”). UGI Utilities owns and operates a natural gas distribution utility (“Gas Utility”) in parts of eastern and southeastern Pennsylvania and an electric distribution utility (“Electric Utility”) in northeastern Pennsylvania. Gas Utility and Electric Utility are subject to regulation by the Pennsylvania Public Utility Commission (“PUC”).

In addition, Enterprises conducts an energy marketing business primarily in the eastern region of the United States through its wholly owned subsidiary, UGI Energy Services, Inc. (“Energy Services”). Energy Services’ wholly owned subsidiary UGI Development Company (“UGID”), and UGID’s subsidiaries own and operate a 48-megawatt coal-fired electric generation station and interests in Pennsylvania-based electricity generation assets. In addition, Energy Services’ wholly owned subsidiary UGI Asset Management, Inc., through its subsidiary Atlantic Energy, Inc. (collectively, “Asset Management”), owns a propane storage terminal located in Chesapeake, Virginia. Through other subsidiaries, Enterprises owns and operates a heating, ventilation,

- 4 -

UGI CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

(Millions of dollars and euros, except per share amounts)

air-conditioning, refrigeration and electrical contracting services business in the Middle Atlantic states (“HVAC/R”).

Our condensed consolidated financial statements include the accounts of UGI and its controlled subsidiary companies, which, except for the Partnership, are majority owned, and are together referred to as “we” or “the Company.” We eliminate all significant intercompany accounts and transactions when we consolidate. We report the public’s limited partner interests in the Partnership and the outside ownership interest in a subsidiary of Antargaz as minority interests. Entities in which we own 50 percent or less and in which we exercise significant influence over operating and financial policies are accounted for by the equity method.

The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). They include all adjustments which we consider necessary for a fair statement of the results for the interim periods presented. Such adjustments consisted only of normal recurring items unless otherwise disclosed. The September 30, 2005 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. These financial statements should be read in conjunction with the financial statements and related notes included in our Annual Report on Form 10-K for the year ended September 30, 2005 (“Company’s 2005 Annual Report”). Due to the seasonal nature of our businesses, the results of operations for interim periods are not necessarily indicative of the results to be expected for a full year.

Earnings Per Common Share. Basic earnings per share reflect the weighted-average number of common shares outstanding. Diluted earnings per share include the effects of dilutive stock options and common stock awards. Shares used in computing basic and diluted earnings per share are as follows:

	Three Months Ended June 30,		Nine Months Ended June 30,
	2006	2005	2006	2005
Denominator (millions of shares):
Average common shares outstanding for basic computation	105.603	104.312	105.374	103.542
Incremental shares issuable for stock options and awards	1.247	1.712	1.211	1.880
Average common shares outstanding for diluted computation	106.850	106.024	106.585	105.422

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UGI CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

(Millions of dollars and euros, except per share amounts)

Equity-Based Compensation. Under UGI’s 2004 Omnibus Equity Compensation Plan (“OECP”), we may grant options to acquire shares of UGI’s Common Stock (“Common Stock”), or issue stock-based awards (“Units”), to key employees and non-employee directors. Under the OECP, awards representing up to 7,000,000 shares of Common Stock may be granted. The maximum number of shares that may be issued pursuant to grants other than stock options or dividend equivalents is 1,600,000 shares.

The exercise price for options may not be less than the fair market value on the grant date. Grants of stock options may vest immediately or ratably over a period of years (generally three to four year periods) and generally can be exercised no later than ten years from the grant date. There are certain change of control and retirement eligibility conditions that, if met, generally result in accelerated vesting or eliminate further service requirements.

Units may vest immediately or ratably over a period of years (generally three to four year periods). Units granted typically provide for the crediting of Common Stock dividend equivalents to participants’ accounts. Dividend equivalents on employee awards will be paid in cash. It is the Company’s practice to issue treasury shares to satisfy option exercises and Unit awards. The Company does not expect to repurchase shares for such purposes during the year ending September 30, 2006. Dividend equivalents on non-employee director Unit awards are paid in additional Common Stock Units. Stock-based awards granted to employees prior to January 1, 2006 may be settled, at the option of the Company, in shares of Common Stock, cash, or a combination of Common Stock and cash. The actual number of shares (or their cash equivalent) ultimately issued, and the actual amount of dividend equivalents paid, is generally dependent upon the achievement of market performance goals and service conditions.

During the current year, the Company modified the terms of all Unit awards made to non-employee directors. Unit awards made to UGI’s seven non-employee directors are now settled 65% in shares of Common Stock and 35% in cash. Prior to this modification, these Unit awards were settled 100% in Common Stock. As a result of the modification and in accordance with the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123R”), the Company recorded additional pre-tax compensation expense of $1.0 million which is reflected in the Condensed Consolidated Statements of Income for the three and nine months ended June 30, 2006.

Effective October 1, 2005, the Company adopted SFAS 123R. Prior to October 1, 2005, as permitted, we applied the provisions of Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”), in recording compensation expense for grants of stock, stock options and other equity instruments to employees. Under APB 25, the Company did not record any compensation expense for stock options, but provided the required pro forma disclosures as if we had determined compensation expense under the fair value method prescribed by the provisions of SFAS No. 123. Under SFAS 123R, all equity-based compensation cost is measured on the grant date or at the end of each period based on the fair value of that award and is recognized in the income statement over the requisite service period.

- 6 -

UGI CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

(Millions of dollars and euros, except per share amounts)

As permitted by SFAS 123R, under the modified prospective approach, effective October 1, 2005, we began recording compensation expense for awards that were not vested as of that date and we did not restate any prior periods.

For the periods prior to and subsequent to the adoption of SFAS 123R, we used the Black-Scholes option-pricing model to estimate the fair value of each option. The adoption of SFAS 123R resulted in pre-tax stock option expense of $0.5 million and $3.3 million during the three and nine month periods ended June 30, 2006, respectively.

Both prior to and subsequent to the adoption of SFAS 123R, we measured and recorded compensation cost of Units awarded to employees prior to January 1, 2006 (that can be settled at our option in cash or shares of Common Stock, or a combination of both) based upon their fair value as of the end of each period. Such awards are presented in the Condensed Consolidated Balance Sheets as liabilities. The fair value of these Units is generally dependent upon the Company’s stock price and its performance in comparison to a group of peer companies and is expensed over requisite service periods.

Effective in June 2006, the Company modified the settlement terms of those Units awarded to 46 employees having an original grant date of January 1, 2006. As a result of this modification, a portion of these Unit awards are presented as equity and a portion remains presented as liabilities. For these Unit awards, we used the Monte Carlo valuation model to estimate their fair value. Compensation costs associated with the portion of awards classified as equity are measured based upon the fair value on the date of modification and recorded over requisite service periods. Compensation costs associated with the portion of awards classified as liabilities are measured based upon fair value as of the end of each period and recorded over requisite service periods. The Company did not incur any incremental compensation expense as a result of this modification.

Certain employees of the General Partner have been granted the right to receive AmeriGas Partners Common Units. A total of 700,000 AmeriGas Partners Common Unit awards may be granted under the General Partner’s plans. Up to 500,000 of these awards may have performance terms similar to UGI Unit awards and compensation expense is estimated and recorded in the same manner and up to 200,000 have service requirements only. The General Partner made a modification to the settlement of certain of its AmeriGas Partner Common Unit awards. The Partnership did not incur any incremental compensation expense as a result of this modification.

Total net pre-tax equity-based compensation expense recorded during the three and nine months ended June 30, 2006 was $5.9 million ($3.9 million after-tax) and $8.3 million ($5.4 million after-tax), respectively. Our compensation expense reflects awards of UGI stock options, UGI Units and AmeriGas Partners Common Unit awards.

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UGI CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

(Millions of dollars and euros, except per share amounts)

The following table illustrates the effects on net income and basic and diluted earnings per share as if we had applied the provisions of SFAS 123R to all equity-based compensation awards for the periods prior to the adoption of SFAS 123R.

	Three Months Ended June 30, 2005			Nine Months Ended June 30, 2005
Net income, as reported	$	0.7		$	196.2
Add: Equity-based employee compensation expense included in reported net income, net of related tax effects		3.1			7.2
Deduct: Total equity-based employee compensation expense determined under the fair value method for all awards, net of related tax effects		(3.4	)		(8.7	)
Pro forma net income	$	0.4		$	194.7
Basic earnings per share:
As reported	$	0.01		$	1.89
Pro forma	$	—		$	1.88
Diluted earnings per share:
As reported	$	0.01		$	1.86
Pro forma	$	—		$	1.85

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UGI CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

(Millions of dollars and euros, except per share amounts)

The following table provides stock option activity information:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Term (years)	Intrinsic Value
Shares under option - September 30, 2005	4,953,018		$	15.95
Granted	1,159,100		$	20.67
Exercised	(213,600	)	$	10.99		$	2.5 million
Forfeited	(31,500	)	$	18.85
Shares under option - June 30, 2006	5,867,018		$	17.04	7.6	$	44.5 million
Options exercisable - June 30, 2006	3,133,852		$	14.45	6.6	$	31.9 million
Unvested options - June 30, 2006	2,733,166		$	20.02	8.7	$	12.6 million

Cash received from the exercises of stock options and any associated tax benefits were $2.3 million and $0.9 million, respectively, during the nine months ended June 30, 2006.

The assumptions used to estimate the fair value of stock options were as follows:

Expected life of option	6 years
Expected volatility	17.7% to 22.6%
Expected dividend yield	2.8% to 6.1%
Risk free interest rate	3.1% to 4.9%

The expected term of option awards represents the period of time which option grants are expected to be outstanding and is derived from historical exercise patterns. Expected volatility is based on the historical volatility of the price of UGI’s Common Stock. Expected dividend yield is based on the historical UGI dividend rates. The risk free interest rate is based upon U.S. Treasury bonds with comparable terms to the options in effect on the date of grant. As of June 30, 2006, there was $3.7 million of unrecognized compensation cost related to non-vested stock options that is expected to be recognized over a weighted average period of 2.2 years.

During the nine months ended June 30, 2006, a portion of vested UGI Unit awards were settled in shares of UGI Common Stock and approximately $2.3 million in cash. As of June 30, 2006, there was a total of approximately $7.4 million of unrecognized pre-tax compensation cost associated with 656,417 UGI Unit awards that is expected to be recognized over a weighted average period of 1.6 years. There was a total of $1.7 million of unrecognized pre-tax compensation expense associated with 113,517 AmeriGas Partners Common Unit awards that is expected to be recognized over a weighted average period of 1.8 years. At June 30, 2006 total liabilities of $13.7 million associated with both UGI’s and the General Partner’s plans are reflected in other current liabilities and other noncurrent liabilities in the Condensed Consolidated Balance Sheet.

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UGI CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

(Millions of dollars and euros, except per share amounts)

The following tables illustrate UGI Unit and AmeriGas Partners Common Unit award activity:

	Number of UGI Units		Weighted-Average Grant Date Fair Value (per Unit)
Non-vested Units - September 30, 2005	313,227		$	21.35
Granted	158,450		$	22.84
Forfeited	(967	)	$	21.25
Vested	(220,279	)	$	21.30
Non-vested Units - June 30, 2006	250,431		$	22.47
	Number of AmeriGas Partners Common Units		Weighted-Average Grant Date Fair Value (per Unit)
Non-vested Units - September 30, 2005	116,000		$	31.81
Granted	38,350		$	35.33
Forfeited	(9,000	)	$	30.89
Vested	(6,750	) (a)	$	23.20
Performance criteria not met	(25,083	)	$	30.43
Non-vested Units - June 30, 2006	113,517		$	33.89

(a) Represents awards under the non-executive plan of 4,500 that were settled through the issuance of new AmeriGas Partners Common Units and 2,250 that were settled in cash.

Comprehensive Income (Loss). The following table presents the components of comprehensive income (loss) for the three and nine months ended June 30, 2006 and 2005.

	Three Months Ended June 30,					Nine Months Ended June 30,
	2006		2005			2006		2005
Net income	$	18.7	$	0.7		$	180.2	$	196.2
Other comprehensive income (loss)		24.6		(31.1	)		2.1		(24.2	)
Comprehensive income (loss)	$	43.3	$	(30.4	)	$	182.3	$	172.0

Other comprehensive income (loss) principally comprises (1) changes in the fair value of derivative commodity instruments, interest rate protection agreements and foreign currency derivatives qualifying as hedges and (2) foreign currency translation adjustments, net of reclassifications to net income.

Income Taxes. Income tax expense is provided on an interim basis using management’s estimate of the annual effective rate. Due to the seasonality of our earnings, changes in management’s estimates of income taxes made during the third or fourth fiscal quarter can have a significant impact on such quarters’ effective tax rates and make the comparisons to effective tax rates in prior periods not meaningful. The effective income tax rates for the three months ended June 30, 2006 and 2005 were 10.1% and 177.8%, respectively. The effective income tax rates for the nine months ended June 30, 2006 and 2005 were 36.8% and 38.7%, respectively. The differences in our effective tax rates principally reflect the beneficial effects of changes in management’s estimate (made during the three months ended June 30, 2006) of taxes associated with planned repatriation of foreign earnings.

Reclassifications. We have reclassified certain prior-year period balances to conform to the current-period presentation.

- 10 -

UGI CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

(Millions of dollars and euros, except per share amounts)

Use of Estimates. We make estimates and assumptions when preparing financial statements in conformity with accounting principles generally accepted in the United States of America. These estimates and assumptions affect the reported amounts of assets and liabilities, revenues and expenses, as well as the disclosure of contingent assets and liabilities. Actual results could differ from these estimates.

Recently Issues Accounting Pronouncements. In March 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 156, “Accounting for Servicing of Financial Assets - An Amendment of FASB Statement No. 140” (“SFAS 156”). SFAS 156 requires that all separately recognized servicing assets and servicing liabilities be initially measured at fair value, unless it is impracticable to do so. SFAS 156 permits, but does not require, the subsequent measurement of servicing assets and servicing liabilities at fair value. SFAS 156 is effective as of the beginning of our fiscal year ending September 30, 2007. We are currently evaluating the impact that the adoption of SFAS 156 will have on our Consolidated Financial Statements.

In June 2006, the FASB issued Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes,” which clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with FASB Statement No. 109, “Accounting for Income Taxes.” FIN 48 provides guidance on the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition. FIN 48 is effective for our fiscal year beginning October 1, 2007. We are currently evaluating the impact that this standard will have on our Consolidated Financial Statements.

2. Acquisitions and Investments

On January 26, 2006, UGI signed a definitive agreement to acquire the natural gas utility assets of PG Energy from Southern Union Company for approximately $580 million in cash, subject to certain adjustments. UGI expects the acquisition to be funded with a combination of debt and existing cash. PG Energy serves approximately 158,000 customers in 13 counties in northeastern and central Pennsylvania. The proposed transaction is subject to PUC approval and is currently expected to close during our fourth fiscal quarter ending September 30, 2006. We anticipate that UGI Utilities will acquire and operate, through a subsidiary, the regulated assets of PG Energy immediately following completion of the acquisition.

On February 15, 2006, Flaga entered into a joint venture with a subsidiary of Progas GmbH & Co KG (“Progas”) to create a company for the retail distribution of LPG in central and eastern Europe. Headquartered in Dortmund, Germany, Progas is controlled by Thyssen’sche Handelsgesellschaft m.b.H. The joint venture company, Zentraleuropa LPG Holding (the “Flaga JV”), an Austrian limited liability company, through its subsidiaries engages in the business of retail distribution of LPG in the Czech Republic, Hungary, Poland, Slovakia and Romania. In forming the joint venture, Flaga contributed the shares of its LPG subsidiaries operating in the Czech Republic and Slovakia to the Flaga JV and paid cash of €9.1 million to Progas. Progas

- 11 -

UGI CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

(Millions of dollars and euros, except per share amounts)

contributed the shares of its LPG subsidiaries operating in the Czech Republic, Hungary, Poland, Romania and Slovakia to the Flaga JV. These LPG operating subsidiaries distributed approximately 77 million gallons of LPG in these five countries in 2005. The Flaga JV is owned and controlled equally by Flaga and Progas. In a related transaction, Flaga purchased Progas’ retail LPG business in Austria.

In March 2006, UGID sold its 50% ownership interest in Hunlock Creek Energy Ventures (“Energy Ventures”) to Allegheny Energy Supply Hunlock Creek, LLC. Energy Ventures’ assets primarily comprised a 44-megawatt gas-fired combustion turbine electric generator and a 48-megawatt coal-fired electric generation facility. As part of the consideration in this sale, Energy Ventures transferred the 48-megawatt coal-fired electric generation station to UGID. UGID recorded a net pre-tax gain of $9.1 million ($5.3 million after-tax) associated with this transaction, which is reflected in other income, net in the Condensed Consolidated Statements of Income for the nine months ended June 30, 2006.

3. Segment Information

We have organized our business units into six reportable segments generally based upon products sold, geographic location (domestic or international) or regulatory environment. Our reportable segments are: (1) AmeriGas Propane; (2) an international LPG segment comprising Antargaz; (3) an international LPG segment comprising Flaga, the Flaga JV, and our international LPG equity investment in China (“Other”); (4) Gas Utility; (5) Electric Utility; and (6) Energy Services (comprising Energy Services’ gas marketing business, UGID’s electric generation business and Asset Management’s propane terminal business). We refer to both international segments collectively as “International Propane.”

The accounting policies of the six segments disclosed are the same as those described in the Organization and Significant Accounting Policies note contained in the Company’s 2005 Annual Report. We evaluate AmeriGas Propane’s performance principally based upon the Partnership’s earnings before interest expense, income taxes, depreciation and amortization (“Partnership EBITDA”). Although we use Partnership EBITDA to evaluate AmeriGas Propane’s profitability, it should not be considered as an alternative to net income (as an indicator of operating performance) or as an alternative to cash flow (as a measure of liquidity or ability to service debt obligations) and is not a measure of performance or financial condition under accounting principles generally accepted in the United States of America. The Company’s definition of Partnership EBITDA may be different from that used by other companies. We evaluate the performance of our International Propane, Gas Utility, Electric Utility and Energy Services segments principally based upon their income before income taxes.

- 12 -

UGI CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(Millions of dollars, except per share amounts)

3. Segment Information (continued)

Three Months Ended June 30, 2006:

							Reportable Segments
	Total			Elims.			AmeriGas Propane			Gas Utility			Electric Utility			Energy Services			International Propane						Corporate & Other (b)
																			Antargaz			Other (a)
Revenues	$	919.1		$	(44.3	)	$	379.1		$	106.3		$	22.9		$	268.7		$	155.9		$	11.5		$	19.0
Cost of sales	$	611.6		$	(43.3	)	$	234.4		$	71.6		$	11.2		$	248.4		$	70.8		$	6.5		$	12.0
Segment profit:
Operating income (c)	$	38.5		$	—		$	2.9		$	6.6		$	5.2		$	10.4		$	11.4		$	0.2		$	1.8
Interest expense		(29.1	)		—			(17.9	)		(4.7	)		(0.6	)		(0.1	)		(5.1	)		(0.3	)		(0.4	)
Minority interests		11.4			—			8.3			—			—			—			3.1			—			—
Income (loss) before income taxes	$	20.8		$	—		$	(6.7	)	$	1.9		$	4.6		$	10.3		$	9.4		$	(0.1	)	$	1.4
Depreciation and amortization	$	36.5		$	—		$	17.8		$	5.6		$	0.8		$	1.6		$	9.6		$	0.8		$	0.3
Partnership EBITDA (c)							$	20.7
Segment assets (at period end)	$	4,617.7		$	(345.8	)	$	1,596.5		$	817.5		$	106.5		$	243.4		$	1,494.6		$	155.6		$	549.4
Investments in equity investees (at period end)	$	57.7		$	—		$	—		$	—		$	—		$	—		$	0.5		$	57.2		$	—
Goodwill (at period end)	$	1,240.9		$	(4.0	)	$	618.3		$	—		$	—		$	11.8		$	565.5		$	42.9		$	6.4
Three Months Ended June 30, 2005:
							Reportable Segments
	Total			Elims.			AmeriGas Propane			Gas Utility			Electric Utility			Energy Services			International Propane						Corporate & Other (b)
																			Antargaz			Other (a)
Revenues	$	932.5		$	(1.1	)	$	349.5		$	89.5		$	22.0		$	290.6		$	148.1		$	15.0		$	18.9
Cost of sales	$	628.8		$	—		$	209.0		$	54.6		$	10.6		$	271.9		$	62.3		$	8.4		$	12.0
Segment profit:
Operating income (c)	$	37.6		$	—		$	1.6		$	7.7		$	4.9		$	10.6		$	12.7		$	0.5		$	(0.4	)
Loss from equity investees		(0.7	)		—			—			—			—			—			(0.7	)		—			—
Loss on extinguishment of debt		(33.6	)		—			(33.6	)		—			—			—			—			—			—
Interest expense		(32.1	)		—			(19.7	)		(3.9	)		(0.5	)		—			(7.1	)		(0.7	)		(0.2	)
Minority interests		27.9			—			27.8			—			—			—			0.1			—			—
Income (loss) before income taxes	$	(0.9	)	$	—		$	(23.9	)	$	3.8		$	4.4		$	10.6		$	5.0		$	(0.2	)	$	(0.6	)
Depreciation and amortization	$	36.5		$	—		$	18.2		$	5.3		$	0.8		$	1.5		$	9.4		$	1.2		$	0.1
Partnership EBITDA (c)							$	(13.7	)
Segment assets (at period end)	$	4,328.7		$	(342.9	)	$	1,517.7		$	768.7		$	97.2		$	254.8		$	1,410.4		$	153.1		$	469.7
Investments in equity investees (at period end)	$	13.5		$	—		$	—		$	—		$	—		$	8.6		$	2.2		$	2.7		$	—
Goodwill (at period end)	$	1,233.9		$	—		$	618.0		$	—		$	—		$	5.9		$	536.5		$	67.9		$	5.6

(a) International Propane-Other principally comprises Flaga, its joint venture and our joint-venture business in China.

(b) Corporate & Other’s results principally comprise UGI Enterprises’ HVAC/R operations, net expenses of UGI’s captive general liability insurance company and UGI Corporation’s unallocated corporate and general expenses and interest income. Corporate & Other’s assets principally comprise cash, short-term investments and an intercompany loan. The intercompany interest associated with the intercompany loan is removed in the segment presentation.

(c) The following table provides a reconciliation of Partnership EBITDA to AmeriGas Propane operating income:

Three months ended June 30,	2006			2005
Partnership EBITDA	$	20.7		$	(13.7	)
Depreciation and amortization		(17.8	)		(18.2	)
Minority interests (i)		—			(0.1	)
Loss on extinguishments of debt		—			33.6
Operating income	$	2.9		$	1.6

(i) Principally represents the General Partner’s 1.01% interest in AmeriGas OLP.

- 13 -

UGI CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(Millions of dollars, except per share amounts)

3. Segment Information (continued)

Nine Months Ended June 30, 2006:

							Reportable Segments
	Total			Elims.			AmeriGas Propane			Gas Utility			Electric Utility			Energy Services			International Propane						Corporate & Other (b)
																			Antargaz			Other (a)
Revenues	$	4,342.5		$	(110.3	)	$	1,727.5		$	622.3		$	72.2		$	1,158.9		$	763.1		$	54.0		$	54.8
Cost of sales	$	3,059.3		$	(107.3	)	$	1,089.5		$	454.5		$	37.7		$	1,093.5		$	422.8		$	34.6		$	34.0
Segment profit:
Operating income (d)	$	461.3		$	—		$	193.9		$	82.2		$	15.0		$	44.7		$	118.6		$	3.1		$	3.8
Loss from equity investees		(1.2	)		—			—			—			—			—			(1.2	)		—			—
Loss on extinguishments of debt		(18.5	)		—			(17.1	)		—			—			—			(1.4	)		—			—
Interest expense		(92.1	)		—			(56.2	)		(14.4	)		(1.9	)		(0.1	)		(18.0	)		(1.2	)		(0.3	)
Minority interests		(64.3	)		(0.2	)		(67.0	)		—			—			—			2.9			—			—
Income before income taxes	$	285.2		$	(0.2	)	$	53.6		$	67.8		$	13.1		$	44.6		$	100.9		$	1.9		$	3.5
Depreciation and amortization	$	108.7		$	—		$	54.0		$	16.4		$	2.5		$	4.8		$	27.4		$	3.0		$	0.6
Partnership EBITDA (d)							$	229.1
Segment assets (at period end)	$	4,617.7		$	(345.8	)	$	1,596.5		$	817.5		$	106.5		$	243.4		$	1,494.6		$	155.6		$	549.4
Investments in equity investees (at period end)	$	57.7		$	—		$	—		$	—		$	—		$	—		$	0.5		$	57.2		$	—
Goodwill (at period end)	$	1,240.9		$	(4.0	)	$	618.3		$	—		$	—		$	11.8		$	565.5		$	42.9		$	6.4
Nine Months Ended June 30, 2005:
							Reportable Segments
	Total			Elims.			AmeriGas Propane			Gas Utility			Electric Utility			Energy Services			International Propane						Corporate & Other (b)
																			Antargaz			Other (a)
Revenues	$	4,082.6		$	(3.6	)	$	1,604.0		$	506.6		$	69.9		$	1,051.8		$	747.1		$	57.3		$	49.5
Cost of sales	$	2,764.6		$	—		$	989.9		$	338.5		$	33.5		$	995.0		$	346.2		$	32.9		$	28.6
Segment profit:
Operating income (c) (d)	$	500.3		$	—		$	178.1		$	84.4		$	16.8		$	30.7		$	184.4		$	5.2		$	0.7
Loss from equity investees		(2.0	)		—			—			—			—			—			(2.0	)		—			—
Loss on extinguishment of debt		(33.6	)		—			(33.6	)		—			—			—			—			—			—
Interest expense		(98.9	)		—			(60.9	)		(12.0	)		(1.5	)		—			(22.0	)		(2.3	)		(0.2	)
Minority interests		(45.7	)		3.9			(48.6	)		—			—			—			(1.0	)		—			—
Income before income taxes (c)	$	320.1		$	3.9		$	35.0		$	72.4		$	15.3		$	30.7		$	159.4		$	2.9		$	0.5
Depreciation and amortization	$	111.8		$	—		$	56.0		$	15.5		$	2.3		$	4.3		$	29.2		$	3.8		$	0.7
Partnership EBITDA (d)							$	208.0
Segment assets (at period end)	$	4,328.7		$	(342.9	)	$	1,517.7		$	768.7		$	97.2		$	254.8		$	1,410.4		$	153.1		$	469.7
Investments in equity investees (at period end)	$	13.5		$	—		$	—		$	—		$	—		$	8.6		$	2.2		$	2.7		$	—
Goodwill (at period end)	$	1,233.9		$	—		$	618.0		$	—		$	—		$	5.9		$	536.5		$	67.9		$	5.6

(a) International Propane-Other principally comprises Flaga, its joint venture and our joint-venture business in China.

(b) Corporate & Other’s results principally comprise UGI Enterprises’ HVAC/R operations, net expenses of UGI’s captive general liability insurance company and UGI Corporation’s unallocated corporate and general expenses and interest income. Corporate & Other’s assets principally comprise cash, short-term investments and an intercompany loan. The intercompany interest associated with the intercompany loan is removed in the segment presentation.

(c) International Propane-Antargaz’ results for the nine months ended June 30, 2005 include $19.9 million of operating income and income before income taxes due to the resolution of certain non-income tax contingencies (see Note 8).

(d) The following table provides a reconciliation of Partnership EBITDA to AmeriGas Propane operating income:

Nine months ended June 30,	2006			2005
Partnership EBITDA (i)	$	229.1		$	208.0
Depreciation and amortization (ii)		(54.0	)		(55.9	)
Minority interests (iii)		1.7			1.5
Loss on extinguishments of debt		17.1			33.6
Gain on sale of Atlantic Energy		—			(9.1	)
Operating income	$	193.9		$	178.1

(i) Includes a $9.1 million gain on the sale of Atlantic Energy to Energy Services during the nine months ended June 30, 2005.

(ii) Excludes General Partner depreciation and amortization of $0.1 million in the nine months ended June 30, 2005.

(iii) Principally represents the General Partner’s 1.01% interest in AmeriGas OLP.

- 14 -

UGI CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

(Millions of dollars and euros, except per share amounts)

4. Long-term Debt

In December 2005, UGI Utilities refinanced $50 million of its maturing 7.14% Medium-Term Notes with proceeds from the issuance of $50 million of 5.64% Medium-Term Notes due in December 2015. These Medium-Term Notes were issued pursuant to the UGI Utilities’ $125 million shelf registration statement with the SEC.

On December 7, 2005, Antargaz executed a new five-year, floating rate Senior Facilities Agreement with a major French bank providing for a €380 million term loan and a €50 million revolving credit facility. The proceeds of the term loan were used in December 2005 to repay immediately the existing €175 million Senior Facilities term loan, to fund the redemption of the €165 million High Yield Bonds in January 2006, including a premium, and for general corporate purposes. As a result of this refinancing, we incurred a pre-tax loss on extinguishment of debt of $1.4 million ($0.9 million after-tax). In addition, Antargaz executed interest rate swap agreements with the same bank to fix the rate of interest on the term loan for the duration of the loan at a rate of approximately 3.25%, plus a margin.

In January 2006, the Partnership and AP Eagle Finance Corp. issued $350 million of 7.125% Senior Notes due 2016. The proceeds of this registered public debt offering were used to refinance AmeriGas OLP’s $160 million Series A and $68.8 million Series C First Mortgage Notes, including a make-whole premium, its $35 million term loan due October 1, 2006 and $59.6 million of the Partnership’s $60 million 10% Senior Notes due 2006 pursuant to a tender offer, plus a premium. We recorded a loss on extinguishment of debt associated with the refinancings of approximately $17.1 million ($4.6 million after-tax).

On July 26, 2006, Flaga entered into a euro-based term loan facility in the amount of €48 million ($61.4 million) and a working capital facility of up to €8 million. These facilities are subject to guarantees by UGI. In addition, on July 26, 2006, the Flaga JV entered into a multi-currency working capital facility of up to €8 million which is also subject to guarantees by UGI.

5. Intangible Assets

The Company’s intangible assets comprise the following:

	June 30, 2006			September 30, 2005
Goodwill (not subject to amortization)	$	1,240.9		$	1,231.2
Other intangible assets:
Customer relationships, noncompete agreements and other	$	183.9		$	177.2
Trademark (not subject to amortization)		43.4			40.8
Gross carrying amount		227.3			218.0
Accumulated amortization		(59.2	)		(45.4	)
Net carrying amount	$	168.1		$	172.6

Changes in intangible assets during the nine months ended June 30, 2006 principally reflect the effects of our investment in the Flaga JV and foreign currency translation. Amortization expense of intangible assets was $3.9 million and $12.1 million for the three and nine months ended June 30, 2006, respectively, and $4.2 million and $13.0 million for the three and nine months ended June 30, 2005, respectively. Our expected aggregate amortization expense of intangible assets for

- 15 -

UGI CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

(Millions of dollars and euros, except per share amounts)

the next five fiscal years is as follows: Fiscal 2006 - $16.3 million; Fiscal 2007 - $15.6 million; Fiscal 2008 - $15.2 million; Fiscal 2009 - $14.6 million; Fiscal 2010 - $13.3 million.

6. Energy Services Accounts Receivable Securitization Facility

Energy Services has a $150 million receivables purchase facility (“Receivables Facility”) with an issuer of receivables-backed commercial paper expiring in April 2009. In order to provide additional short-term liquidity during the peak heating season due to increased product costs, the maximum level of funding available at any one point in time from this facility was temporarily increased to $300 million for the period from November 1, 2005 to April 24, 2006. The fees associated with temporarily increasing the maximum level of funding were not material. After April 24, 2006, the maximum level of funding available at any one time from this facility is $150 million. Under the Receivables Facility, Energy Services transfers, on an ongoing basis and without recourse, its trade accounts receivable to its wholly owned, special purpose subsidiary, Energy Services Funding Corporation (“ESFC”), which is consolidated for financial statement purposes. ESFC, in turn, has sold, and subject to certain conditions, may from time to time sell, an undivided interest in some or all of the receivables to a commercial paper conduit of a major bank. The proceeds of these sales are less than the face amount of the accounts receivable sold by an amount that approximates the purchaser’s financing cost of issuing its own receivables-backed commercial paper. ESFC was created and has been structured to isolate its assets from creditors of Energy Services and its affiliates, including UGI. This two-step transaction is accounted for as a sale of receivables following the provisions of SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.” Energy Services continues to service, administer and collect trade receivables on behalf of the commercial paper issuer and ESFC.

During the nine months ended June 30, 2006, Energy Services sold trade receivables totaling $1,073.4 million to ESFC. During the nine months ended June 30, 2006, ESFC sold an aggregate $724.5 million of undivided interests in its trade receivables to the commercial paper conduit. At June 30, 2006, the outstanding balance of ESFC trade receivables was $30.2 million, which is net of $42.0 million that was sold to the commercial paper conduit and removed from the balance sheet.

In addition, a major bank has committed to Energy Services to issue up to $50 million of standby letters of credit, secured by cash or marketable securities (“LC Facility”). At June 30, 2006, there were no letters of credit outstanding. Energy Services expects to fund the collateral requirements with borrowings under its Receivables Facility. The LC Facility expires in April 2007.

7. Defined Benefit Pension and Other Postretirement Plans

We sponsor a defined benefit pension plan (“UGI Utilities Pension Plan”) for employees of UGI, UGI Utilities, and certain of UGI’s other wholly owned subsidiaries. In addition, we provide postretirement health care benefits to certain retirees and postretirement life insurance benefits to nearly all domestic active and retired employees. Antargaz provides certain pension and postretirement health care benefits for its employees.

- 16 -

UGI CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

(Millions of dollars and euros, except per share amounts)

Net periodic pension expense and other postretirement benefit costs include the following components:

	Pension Benefits						Other Postretirement Benefits
	Three Months Ended June 30,						Three Months Ended June 30,
	2006			2005			2006			2005
Service cost	$	1.5		$	1.4		$	0.1		$	0.1
Interest cost		3.5			3.5			0.3			0.5
Expected return on assets		(4.7	)		(4.5	)		(0.2	)		(0.1	)
Amortization of:
Transition obligation		—			—			0.1			0.2
Prior service cost (benefit)		0.2			0.2			(0.1	)		—
Actuarial loss		0.4			0.3			—			0.1
Net benefit cost		0.9			0.9			0.2			0.8
Change in regulatory and other assets and liabilities		(0.1	)		—			0.7			0.2
Net expense	$	0.8		$	0.9		$	0.9		$	1.0
	Pension Benefits						Other Postretirement Benefits
	Nine Months Ended June 30,						Nine Months Ended June 30,
	2006			2005			2006			2005
Service cost	$	4.5		$	4.2		$	0.2		$	0.3
Interest cost		10.5			10.6			0.9			1.6
Expected return on assets		(14.2	)		(13.5	)		(0.5	)		(0.4	)
Amortization of:
Transition obligation		—			—			0.2			0.7
Prior service cost (benefit)		0.6			0.5			(0.2	)		—
Actuarial loss		1.3			1.0			0.1			0.2
Net benefit cost		2.7			2.8			0.7			2.4
Change in regulatory and other assets and liabilities		(0.3	)		—			2.1			0.7
Net expense	$	2.4		$	2.8		$	2.8		$	3.1

UGI Utilities Pension Plan assets are held in trust and consist principally of equity and fixed income mutual funds. The Company does not believe it will be required to make any contributions to the UGI Utilities Pension Plan during the year ending September 30, 2006 for ERISA funding purposes. Pursuant to orders previously issued by the PUC, UGI Utilities has established a Voluntary Employees’ Beneficiary Association (“VEBA”) trust to fund and pay UGI Utilities’ postretirement health care and life insurance benefits referred to above by depositing into the VEBA the annual amount of postretirement benefit costs determined under SFAS No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions.” The difference between the annual amount calculated and the amount included in UGI Utilities’ rates is deferred for future recovery from, or refund to, ratepayers. Amounts contributed to the VEBA by UGI Utilities were not material during the nine months ended June 30, 2006, nor are they expected to be material for the year ending September 30, 2006.

We also sponsor unfunded and non-qualified supplemental executive retirement income plans. We recorded pre-tax expense for these plans of $0.5 million and $1.5 million for the three and nine

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UGI CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

(Millions of dollars and euros, except per share amounts)

months ended June 30, 2006, respectively, and $0.5 million and $1.3 million for the three and nine months ended June 30, 2005, respectively.

8. Commitments and Contingencies

The Partnership has succeeded to certain lease guarantee obligations of Petrolane relating to Petrolane’s divestiture of non-propane operations before its 1989 acquisition by QFB Partners. Future lease payments under these leases total approximately $8 million at June 30, 2006. The leases expire through 2010 and some of them are currently in default. The Partnership has succeeded to the indemnity agreement of Petrolane by which Texas Eastern Corporation (“Texas Eastern”), a prior owner of Petrolane, agreed to indemnify Petrolane against any liabilities arising out of the conduct of businesses that do not relate to, and are not a part of, the propane business, including lease guarantees. In December 1999, Texas Eastern filed for dissolution under the Delaware General Corporation Law. PanEnergy Corporation (“PanEnergy”), Texas Eastern’s sole stockholder, assumed all of Texas Eastern’s liabilities as of December 20, 2002, to the extent of the value of Texas Eastern’s assets transferred to PanEnergy as of that date (which was estimated to exceed $94 million), and to the extent that such liabilities arise within ten years from Texas Eastern’s date of dissolution. Notwithstanding the dissolution proceeding, and based on Texas Eastern previously having satisfied directly defaulted lease obligations without the Partnership’s having to honor its guarantee, we believe that the probability that the Partnership will be required to directly satisfy the lease obligations subject to the indemnification agreement is remote.

On August 21, 2001, AmeriGas Partners, through AmeriGas OLP, acquired the propane distribution businesses of Columbia Energy Group (the “2001 Acquisition”) pursuant to the terms of a purchase agreement (the “2001 Acquisition Agreement”) by and among Columbia Energy Group (“CEG”), Columbia Propane Corporation (“Columbia Propane”), Columbia Propane, L.P. (“CPLP”), CP Holdings, Inc. (“CPH,” and together with Columbia Propane and CPLP, the “Company Parties”), AmeriGas Partners, AmeriGas OLP and the General Partner (together with AmeriGas Partners and AmeriGas OLP, the “Buyer Parties”). As a result of the 2001 Acquisition, AmeriGas OLP acquired all of the stock of Columbia Propane and CPH and substantially all of the partnership interests of CPLP. Under the terms of an earlier acquisition agreement (the “1999 Acquisition Agreement”), the Company Parties agreed to indemnify the former general partners of National Propane Partners, L.P. (a predecessor company of the Columbia Propane businesses) and an affiliate (collectively, “National General Partners”) against certain income tax and other losses that they may sustain as a result of the 1999 acquisition by CPLP of National Propane Partners, L.P. (the “1999 Acquisition”) or the operation of the business after the 1999 Acquisition (“National Claims”). At June 30, 2006, the potential amount payable under this indemnity by the Company Parties was approximately $58 million. These indemnity obligations will expire on the date that CPH acquires the remaining outstanding partnership interest of CPLP, which is expected to occur on or after July 19, 2009. Under the terms of the 2001 Acquisition Agreement, CEG agreed to indemnify the Buyer Parties and the Company Parties against any losses that they sustain under the 1999 Acquisition Agreement and related agreements (“Losses”), including National Claims, to the extent such claims are based on acts or omissions of CEG or the Company Parties prior to the 2001 Acquisition. The Buyer Parties agreed to indemnify CEG against Losses, including National Claims, to the extent such claims are based on acts or omissions of the Buyer Parties or the Company Parties after the 2001 Acquisition. CEG and the Buyer Parties have agreed

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UGI CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

(Millions of dollars and euros, except per share amounts)

to apportion certain losses resulting from National Claims to the extent such losses result from the 2001 Acquisition itself.

Samuel and Brenda Swiger and their son (the “Swigers”) sustained personal injuries and property damage as a result of a fire that occurred when propane that leaked from an underground line ignited. In July 1998, the Swigers filed a class action lawsuit against AmeriGas Propane, L.P. (named incorrectly as “UGI/AmeriGas, Inc.”), in the Circuit Court of Monongalia County, West Virginia, in which they sought to recover an unspecified amount of compensatory and punitive damages and attorney’s fees, for themselves and on behalf of persons in West Virginia for whom the defendants had installed propane gas lines, allegedly resulting from the defendants’ failure to install underground propane lines at depths required by applicable safety standards. In 2003, AmeriGas OLP settled the individual personal injury and property damage claims of the Swigers. In 2004, the court granted the plaintiffs’ motion to include customers acquired from Columbia Propane in August 2001 as additional potential class members and the plaintiffs amended their complaint to name additional parties pursuant to such ruling. Subsequently, in March 2005, AmeriGas OLP filed a crossclaim against CEG, former owner of Columbia Propane, seeking indemnification for conduct undertaken by Columbia Propane prior to AmeriGas OLP’s acquisition. Class counsel has indicated that the class is seeking compensatory damages in excess of $12 million plus punitive damages, civil penalties and attorneys’ fees. We believe we have good defenses to the claims of the class members and intend to vigorously defend against the remaining claims in this lawsuit.

From the late 1800s through the mid-1900s, UGI Utilities and its former subsidiaries owned and operated a number of manufactured gas plants (“MGPs”) prior to the general availability of natural gas. Some constituents of coal tars and other residues of the manufactured gas process are today considered hazardous substances under the Superfund Law and may be present on the sites of former MGPs. Between 1882 and 1953, UGI Utilities owned the stock of subsidiary gas companies in Pennsylvania and elsewhere and also operated the businesses of some gas companies under agreement. Pursuant to the requirements of the Public Utility Holding Company Act of 1935, UGI Utilities divested all of its utility operations other than those which now constitute Gas Utility and Electric Utility.

UGI Utilities does not expect its costs for investigation and remediation of hazardous substances at Pennsylvania MGP sites to be material to its results of operations because Gas Utility is currently permitted to include in rates, through future base rate proceedings, prudently incurred remediation costs associated with such sites. UGI Utilities has been notified of several sites outside Pennsylvania on which private parties allege MGPs were formerly owned or operated by it or owned or operated by its former subsidiaries. Such parties are investigating the extent of environmental contamination or performing environmental remediation. UGI Utilities is currently litigating three claims against it relating to out-of-state sites. We accrue environmental investigation and cleanup costs when it is probable that a liability exists and the amount or range of amounts can be reasonably estimated.

Management believes that under applicable law UGI Utilities should not be liable in those instances in which a former subsidiary owned or operated an MGP. There could be, however, significant future costs of an uncertain amount associated with environmental damage caused by

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UGI CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

(Millions of dollars and euros, except per share amounts)

MGPs outside Pennsylvania that UGI Utilities directly operated, or that were owned or operated by former subsidiaries of UGI Utilities, if a court were to conclude that (1) the subsidiary’s separate corporate form should be disregarded or (2) UGI Utilities should be considered to have been an operator because of its conduct with respect to its subsidiary’s MGP.

By letter dated July 14, 2006, SCANA Corporation (“SCANA”) demanded contribution from UGI Utilities for a portion of past and future remediation costs related to the operations of a former MGP located in Charleston, South Carolina. According to the letter, the plant operated from 1855 to 1954. SCANA alleges that UGI Utilities controlled operations of the plant from 1910 to 1926. SCANA asserts that it has spent approximately $22 million in remediation costs and $26 million in third-party claims relating to the site. It estimates that future remediation costs could be as high as $2.5 million and asserts that it has received a demand from the United States Justice Department for natural resource damages. SCANA claims that UGI Utilities is liable for 47% of the costs associated with the site. UGI Utilities is in the process of reviewing the information provided by SCANA and is investigating this claim.

In April 2003, Citizens Communications Company (“Citizens”) served a complaint naming UGI Utilities as a third-party defendant in a civil action pending in the United States District Court for the District of Maine. In that action, the plaintiff, City of Bangor, Maine (“City”), sued Citizens to recover environmental response costs associated with MGP wastes generated at a plant allegedly operated by Citizens’ predecessors at a site on the Penobscot River. Citizens subsequently joined UGI Utilities and ten other third-party defendants alleging that the third-party defendants are responsible for an equitable share of costs Citizens may be required to pay to the City for cleaning up tar deposits in the Penobscot River. Citizens alleges that UGI Utilities and its predecessors owned and operated the plant from 1901 to 1928. Studies conducted by the City and Citizens suggest that it could cost up to $18 million to clean up the river. Citizens’ third-party claims have been stayed pending a resolution of the City’s suit against Citizens, which was tried in September 2005. Maine’s Department of Environmental Protection (“DEP”) informed UGI Utilities in March of 2005 that it considers UGI Utilities to be a potentially responsible party for costs incurred by the State of Maine related to gas plant contaminants at this site. On June 27, 2006, the court issued an order finding Citizens responsible for 60% of the cleanup costs. The amount of Citizens’ liability has not been finally determined. UGI Utilities believes that it has good defenses to Citizens’ claim and to any claim that the DEP may bring to recover its costs, and is defending the Citizens’ suit.

By letter dated July 29, 2003, Atlanta Gas Light Company (“AGL”) served UGI Utilities with a complaint filed in the United States District Court for the Middle District of Florida in which AGL alleges that UGI Utilities is responsible for 20% of approximately $8 million incurred by AGL in the investigation and remediation of a former MGP site in St. Augustine, Florida. UGI Utilities formerly owned stock of the St. Augustine Gas Company, the owner and operator of the MGP. In March 2005, the court granted UGI Utilities’ motion for summary judgment dismissing AGL’s complaint. AGL has appealed.

AGL previously informed UGI Utilities that it has begun remediation of MGP wastes at a site owned by AGL in Savannah, Georgia. A former subsidiary of UGI Utilities operated the MGP in the early 1900s. AGL believes that the total cost of remediation could be as high as $55 million.

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UGI CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

(Millions of dollars and euros, except per share amounts)

AGL has not filed suit against UGI Utilities for a share of these costs. UGI Utilities believes that it will have good defenses to any action that may arise out of this site.

On September 20, 2001, Consolidated Edison Company of New York (“ConEd”) filed suit against UGI Utilities in the United States District Court for the Southern District of New York, seeking contribution from UGI Utilities for an allocated share of response costs associated with investigating and assessing gas plant related contamination at former MGP sites in Westchester County, New York. The complaint alleges that UGI Utilities “owned and operated” the MGPs prior to 1904. The complaint also seeks a declaration that UGI Utilities is responsible for an allocated percentage of future investigative and remedial costs at the sites. ConEd believes that the cost of remediation for all of the sites could exceed $70 million.

The trial court granted UGI Utilities’ motion for summary judgment and dismissed ConEd’s complaint. The grant of summary judgment was entered April 1, 2004. ConEd appealed and on September 9, 2005 a panel of the Second Circuit Court of Appeals affirmed in part and reversed in part the decision of the trial court. The appellate panel affirmed the trial court’s decision dismissing claims that UGI Utilities was liable under CERCLA as an operator of MGPs owned and operated by its former subsidiaries. The appellate panel reversed the trial court’s decision that UGI Utilities was released from liability at three sites where UGI Utilities operated MGPs under lease. On October 7, 2005, UGI Utilities filed for reconsideration of the panel’s order. On January 17, 2006, the Second Circuit denied UGI Utilities’ request for reconsideration of the panel’s order.

By letter dated June 24, 2004, KeySpan Energy (“KeySpan”) informed UGI Utilities that KeySpan has spent $2.3 million and expects to spend another $11 million to clean up an MGP site it owns in Sag Harbor, New York. KeySpan believes that UGI Utilities is responsible for approximately 50% of these costs as a result of UGI Utilities’ alleged direct ownership and operation of the plant from 1885 to 1902. By letter dated June 6, 2006, KeySpan reported that the New York Department of Environmental Conservation has approved a remedy for the site that is estimated to cost approximately $10 million. KeySpan believes that the cost could go as high as $20 million. UGI Utilities is in the process of reviewing the information provided by KeySpan and is investigating this claim.

By letter dated August 5, 2004, Yankee Gas Services Company and Connecticut Light and Power Company, subsidiaries of Northeast Utilities, (together the “Northeast Companies”), demanded contribution from UGI Utilities for past and future remediation costs related to MGP operations on thirteen sites owned by the Northeast Companies in nine cities in the State of Connecticut. The Northeast Companies allege that UGI Utilities controlled operations of the plants from 1883 to 1941. By letter dated March 17, 2006, the Northeast Companies estimated that remediation costs for all of the sites would total approximately $215 million and claimed that UGI Utilities is responsible for approximately $103 million of this amount. Based on information supplied by the Northeast Companies and UGI Utilities’ own investigation, UGI Utilities believes that it may have operated one of the sites, Waterbury North, under lease for a portion of its operating history. UGI Utilities is reviewing the Northeast Companies’ estimate that remediation costs at Waterbury North could total $23 million. UGI Utilities believes that it will have good defenses to any action that may arise out of the remaining sites.

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UGI CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

(Millions of dollars and euros, except per share amounts)

The French tax authorities levy taxes on legal entities and individuals regularly operating a business in France which are commonly referred to collectively as “business tax.” The amount of business tax charged annually is generally dependent upon the value of certain of the entity’s tangible fixed assets. Prior to the Antargaz Acquisition, Antargaz filed suit against French tax authorities in connection with the assessment of business tax related to the tax treatment of certain of its owned tanks at customer locations. Elf Antar France and Elf Aquitaine, now Total France, former owners of Antargaz, agreed to indemnify Antargaz for all payments that would have been due from Antargaz in respect of the tax related to its tanks for the period from January 1, 1997 through December 31, 2000. Antargaz has recorded liabilities for business taxes related to various classes of equipment. On February 4, 2005, Antargaz received a letter that was issued by the French government to the French Committee of Butane and Propane (“CFBP”), a butane/propane industry group, concerning the business tax, that eliminated the requirement for Antargaz to pay business tax associated with tanks at certain customer locations. In addition, during Fiscal 2005, resolution was reached relating to business taxes relating to a prior year. Further changes in the French government’s interpretation of the tax laws or in the tax laws themselves could have either an adverse or a favorable effect on our results of operations. Our Condensed Consolidated Statement of Income for the nine months ended June 30, 2005 includes a pre-tax gain of $19.9 million and a net after-tax gain of $14.9 million associated with the resolution of certain business tax matters related principally to prior years.

In addition to these matters, there are other pending claims and legal actions arising in the normal course of our businesses. We cannot predict with certainty the final results of environmental and other matters. However, it is reasonably possible that some of them could be resolved unfavorably to us and result in losses in excess of recorded amounts. We are unable to estimate any possible losses in excess of recorded amounts. Although we currently believe, after consultation with counsel, that damages or settlements, if any, recovered by the plaintiffs in such claims or actions will not have a material adverse effect on our financial position, damages or settlements could be material to our operating results or cash flows in future periods depending on the nature and timing of future developments with respect to these matters and the amounts of future operating results and cash flows.

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UGI CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

Information contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements use forward-looking words such as “believe,” “plan,” “anticipate,” “continue,” “estimate,” “expect,” “may,” “will,” or other similar words. These statements discuss plans, strategies, events or developments that we expect or anticipate will or may occur in the future.

A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. We believe that we have chosen these assumptions or bases in good faith and that they are reasonable. However, we caution you that actual results almost always vary from assumed facts or bases, and the differences between actual results and assumed facts or bases can be material, depending on the circumstances. When considering forward-looking statements, you should keep in mind the following important factors which could affect our future results and could cause those results to differ materially from those expressed in our forward-looking statements: (1) adverse weather conditions resulting in reduced demand; (2) cost volatility and availability of propane and other LPG, oil, electricity and natural gas and the capacity to transport product to our market areas; (3) changes in domestic and foreign laws and regulations, including safety, tax and accounting matters; (4) competitive pressures from the same and alternative energy sources; (5) failure to acquire new customers thereby reducing or limiting any increase in revenues; (6) liability for environmental claims; (7) increased customer conservation measures due to high energy prices and improvements in energy efficiency and technology resulting in reduced demand; (8) adverse labor relations; (9) large customer, counterparty or supplier defaults; (10) liability in excess of insurance coverage for personal injury and property damage arising from explosions and other catastrophic events, including acts of terrorism, resulting from operating hazards and risks incidental to generating and distributing electricity and transporting, storing and distributing natural gas, propane and other LPG; (11) political, regulatory and economic conditions in the United States and in foreign countries, including foreign currency rate fluctuations, particularly in the euro; (12) reduced access to capital markets and interest rate fluctuations; (13) reduced distributions from subsidiaries; and (14) the timing and success of the Company’s efforts to develop new business opportunities.

These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors could also have material adverse effects on future results. We undertake no obligation to update publicly any forward-looking statement whether as a result of new information or future events except as required by the federal securities laws.

ANALYSIS OF RESULTS OF OPERATIONS

The following analyses compare our results of operations for (1) the three months ended June 30, 2006 (“2006 three-month period”) with the three months ended June 30, 2005 (“2005 three-month period”) and (2) the nine months ended June 30, 2006 (“2006 nine-month period”) with the nine months ended June 30, 2005 (“2005 nine-month period”). Our analysis of results of operations should be read in conjunction with the segment information included in Note 3 to the Condensed Consolidated Financial Statements.

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UGI CORPORATION AND SUBSIDIARIES

Executive Overview

Because most of our businesses sell energy products used in large part for heating purposes, our Company’s results are largely seasonal and dependent upon weather conditions, particularly during the peak-heating season months of November through March. As a result, our net income is generally highest in our first and second fiscal quarters. In addition to the effects of weather conditions, our volumes can reflect customers’ responses to volatile and increasing commodity process resulting in customer conservation.

During the 2006 nine-month period, temperatures within each of our domestic business units’ service territories were significantly warmer than normal and were warmer than in the prior-year nine-month period. Net income during the 2006 nine-month period declined $16.0 million compared to the prior year. The decline in earnings reflects (1) the absence of $14.9 million (equal to $0.14 per diluted share) of income recorded in the 2005 nine-month period resulting from the resolution of certain of Antargaz’ non-income tax contingencies and (2) Antargaz’ unusually high LPG margins per gallon reflected in the prior year. The effects of these two factors were partially offset by approximately $3.9 million lower after-tax losses on early extinguishments of debt primarily associated with AmeriGas Propane refinancings and a $5.3 million after-tax gain on Energy Services’ sale of its 50% partnership interest in Hunlock Creek Energy Ventures (“Energy Ventures”). In addition, the stronger dollar versus the euro accounted for approximately $7 million of the decrease in net income in the 2006 nine-month period. The effective tax rate during the 2006 nine-month period was almost 2% lower than in the 2005 nine-month period principally due to the beneficial effects of changes in management’s estimate of taxes to be paid associated with the planned repatriation of foreign earnings. As a result of this rate change made during our fiscal third quarter, the effective tax rate for the 2006 three-month period was 10.1% compared to 177.8% for the 2005 three-month period.

In January 2006, we announced that we signed a definitive agreement to acquire the natural gas utility assets of PG Energy from Southern Union Company for approximately $580 million in cash, subject to certain adjustments. The acquisition, which is subject to PUC approval, is expected to close during our fourth fiscal quarter ending September 30, 2006. We expect to fund the acquisition with debt and existing cash. In February 2006, Flaga entered into a joint venture with a subsidiary of Progas GmbH & Co KG expanding our international presence in central and eastern Europe (the “Flaga JV”).

Net income by business unit:

	Three Months Ended June 30,						Nine Months Ended June 30,
	2006			2005			2006		2005
	(millions of dollars)
Net income (loss):
AmeriGas Propane (a)	$	(4.1	)	$	(14.5	)	$	32.0	$	22.9
International Propane		13.1			6.4			73.0		100.6
Gas Utility		0.8			2.3			40.7		43.5
Electric Utility		2.7			2.7			7.7		9.1
Energy Services		6.4			6.3			26.7		18.2
Corporate & Other		(0.2	)		(2.5	)		0.1		1.9
Total net income	$	18.7		$	0.7		$	180.2	$	196.2

(a) Amounts are net of minority interests in AmeriGas Partners, L.P.

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UGI CORPORATION AND SUBSIDIARIES

2006 three-month period compared to the 2005 three-month period

AmeriGas Propane:

For the three months ended June 30, (Millions of dollars)	2006			2005			Increase (Decrease)
Revenues	$	379.1		$	349.5		$	29.6		8.5	%
Total margin (a)	$	144.7		$	140.5		$	4.2		3.0	%
Partnership EBITDA (b)	$	20.7		$	(13.7	)	$	34.4		N.M.
Operating income	$	2.9		$	1.6		$	1.3		81.3	%
Retail gallons sold (millions)		171.1			181.9			(10.8	)	(5.9	)%
Degree days - % (warmer) than normal (c)		(21.9	)%		(4.9	)%		—		—

N.M. – Not meaningful

(a) Total margin represents total revenues less total cost of sales.

(b) Partnership EBITDA (earnings before interest expense, income taxes and depreciation and amortization) should not be considered as an alternative to net income (as an indicator of operating performance) or as an alternative to cash flow (as a measure of liquidity or ability to service debt obligations) and is not a measure of performance or financial condition under accounting principles generally accepted in the United States of America. Management uses Partnership EBITDA as the primary measure of segment profitability for the AmeriGas Propane segment (see Note 3 to the Condensed Consolidated Financial Statements).

(c) Deviation from average heating degree-days based upon national weather statistics provided by the National Oceanic and Atmospheric Administration (“NOAA”) for 335 airports in the United States, excluding Alaska.

Based upon national heating degree-day data, temperatures during the 2006 three-month period were 21.9% warmer than normal and 18.0% warmer than the prior-year period. Retail propane volumes sold decreased approximately 6% principally due to the warmer weather and the negative effects of customer conservation driven by continued high propane selling prices.

Retail propane revenues increased $21.0 million reflecting a $38.7 million increase due to higher average selling prices partially offset by a $17.7 million decrease due to the lower retail volumes sold. Wholesale propane revenues increased $1.0 million reflecting a $3.6 million increase resulting from higher average selling prices partially offset by a $2.6 million decrease due to the lower volumes sold. In the 2006 three-month period, our average retail propane product cost per retail gallon sold was approximately 19% higher than in the 2005 three-month period, which resulted in higher year-over-year prices to our customers. Total cost of sales increased to $234.4 million in the 2006 three-month period from $209.0 million in the 2005 three-month period, primarily reflecting the increase in propane product costs partially offset by the decreased volumes sold. Total margin increased $4.2 million compared to the 2005 three-month period due to increased customer pricing of propane and ancillary sales and services in response to increases in costs incurred.

Partnership EBITDA during the 2006 three-month period was $20.7 million compared to $(13.7) million during the 2005 three-month period. This $34.4 million increase in Partnership EBITDA primarily reflects (1) the absence of a $33.6 million loss on the early extinguishment of debt recognized in May 2005 resulting from the Partnership’s refinancing of $373.4 million of its 8.875% Senior Notes due 2011 through the issuance of $415 million of 7.25% Senior Notes due 2015 and (2) the aforementioned increase in total margin, partially offset by a $3.8 million increase in operating and administrative expenses. The increase in operating and administrative expenses principally resulted from higher vehicle fuel and lease expense and higher employee compensation and benefits expenses. These

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UGI CORPORATION AND SUBSIDIARIES

increases were partially offset by a $2.7 million favorable expense reduction related to general insurance, mainly reflecting continued improvement in claims history.

Operating income increased $1.3 million primarily reflecting the increase in total margin and a decrease in depreciation and amortization expense, partially offset by the previously mentioned increase in operating and administrative expenses.

International Propane:

For the three months ended June 30, (Millions of dollars)	2006		2005		Increase (Decrease)
Revenues	$	167.4	$	163.1	$	4.3		2.6	%
Total margin (a)	$	90.1	$	92.4	$	(2.3	)	(2.5	)%
Operating income	$	11.6	$	13.2	$	(1.6	)	(12.1	)%
Income before income taxes	$	9.3	$	4.8	$	4.5		93.8	%
Antargaz retail gallons sold (millions)		54.0		59.2		(5.2	)	(8.8	)%
Antargaz total margin, millions of euros (a)	€	67.5	€	68.0		(€0.5	)	(0.7	)%

(a) Total margin represents total revenues less total cost of sales.

Based upon heating degree day data, weather in Antargaz’ service territory was approximately 22% warmer than normal in the 2006 three-month period compared to weather that was approximately 20% warmer than normal in the 2005 three-month period. Flaga experienced warmer than normal weather across its service territories in both the 2006 and 2005 three-month periods. The monthly average currency translation rate was $1.26 per euro during both the 2006 and 2005 three-month periods. Antargaz’ retail LPG volumes sold decreased to 54.0 million gallons in the 2006 three-month period from 59.2 million gallons in the 2005 three-month period. The decrease in Antargaz retail volumes sold was experienced across all of Antargaz’ classes of customers and was due in part to warmer than normal weather and price-induced customer conservation. In addition, competition in the LPG business in France and competition among LPG and other fuels continues to intensify. In particular, in the butane cylinder market, certain hyper/supermarkets have expanded vertically and are marketing their own cylinders.

International Propane revenues increased slightly during the 2006 three-month period primarily due to higher retail LPG selling prices reflecting the effects of significantly higher LPG product cost largely offset by the lower retail gallons sold. Both Antargaz and Flaga experienced higher LPG product costs per retail gallon of LPG compared to the prior-year three-month period. Despite the lower volumes sold, International Propane’s total cost of sales increased to $80.4 million in the 2006 three-month period from $70.9 million in the 2005 three-month period reflecting the higher LPG costs.

Total margin declined $2.3 million in the 2006 three-month period primarily reflecting (1) the effects of Antargaz’ lower retail volumes sold partially offset by higher average margin per gallon of LPG (“unit margin”) and (2) the absence of margin from Flaga’s Czech Republic and Slovakia businesses that were contributed to the Flaga JV in February 2006. Antargaz’ total base currency margin declined €0.5 million reflecting the lower retail LPG volumes sold largely offset by the higher unit margins.

International Propane operating income declined $1.6 million in the 2006 three-month period principally reflecting the decline in total margin and $1.4 million lower other income partially offset by $1.8 million in lower operating and administrative expenses and lower depreciation and amortization expense. The lower other income largely reflects expenses associated with the shut-down of two of Antargaz’ filling and distribution centers. The decline in operating and administrative expenses largely reflects the absence of expenses associated with Flaga’s operations that were contributed to the Flaga JV.

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UGI CORPORATION AND SUBSIDIARIES

The decrease in income before income taxes principally reflects the decrease in operating income, a $3.1 million increase in Antargaz’ minority interests share of expenses primarily associated with the shut-down of one its majority-owned filling centers and lower interest expense largely attributable to Antargaz’ refinancing of its High Yield Bonds in January 2006.

Gas Utility:

For the three months ended June 30, (Millions of dollars)	2006			2005			Increase (Decrease)
Revenues (a)	$	106.3		$	89.5		$	16.8		18.8	%
Total margin (a) (b)	$	34.7		$	34.9		$	(0.2	)	(0.6	)%
Operating income	$	6.6		$	7.7		$	(1.1	)	(14.3	)%
Income before income taxes	$	1.9		$	3.8		$	(1.9	)	(50.0	)%
System throughput - billions of cubic feet (“bcf”) (a)		14.3			15.3			(1.0	)	(6.5	)%
Degree days - % (warmer) colder than normal (c)		(13.5	)%		(3.5	)%		—		—

(a) Beginning in Fiscal 2006, Gas Utility adjusted its method of estimating unbilled throughput and associated revenues for service provided through the end of the month by more closely correlating such estimated throughput to distribution system sendout data. The Company believes that the new method of estimating Gas Utility’s unbilled throughput results in a more accurate quarterly estimate of unbilled revenues and associated total margin. The change in the method of estimating unbilled throughput did not have a material impact on Gas Utility’s throughput, revenues or margin for the 2006 three-month period.

(b) Total margin represents total revenues less total cost of sales.

(c) Deviation from average heating degree days based upon weather statistics provided by the National Oceanic and Atmospheric Administration (“NOAA”) for 4 airports located within our service territory. The 2005 three-month period degree day statistics have been restated to reflect the current-year, four-location average from the previous single location statistic.

Weather in Gas Utility’s service territory based upon heating degree days was 13.5% warmer than normal during the 2006 three-month period compared to 3.5% warmer than normal in the prior-year three-month period. Notwithstanding year-over-year growth in the number of Gas Utility’s customers, total distribution system throughput decreased 6.5% in the 2006 three-month period reflecting a 0.7 bcf decrease in sales to firm- residential, commercial and industrial (“retail core-market”) customers and lower firm delivery service volumes. The decrease in retail core-market throughput largely reflects the effects of significantly warmer spring weather and, to a lesser extent, the continued effects of lower average usage per customer resulting from significantly higher natural gas prices.

Notwithstanding the decline in distribution system throughput, Gas Utility revenues increased $16.8 million during the 2006 three-month period principally reflecting (1) a $10.9 million increase in revenues from low-margin off-system sales and (2) increased retail core-market revenues, reflecting the result of higher average purchased gas cost (“PGC”) rates partially offset by the effects of the lower volumes sold. Increases or decreases in retail core-market customer revenues and cost of sales result principally from changes in retail core-market volumes and the level of gas costs collected through the PGC recovery mechanism. Under this recovery mechanism, Gas Utility records the cost of gas associated with sales to retail core-market customers at amounts included in PGC rates. The difference between actual gas costs and the amount included in rates is deferred on the balance sheet as a regulatory asset or liability and represents amounts to be collected from or refunded to customers in a future period. As a result of this PGC recovery mechanism, increases or decreases in the cost of gas associated with retail core-market customers have no direct effect on retail core-market margin. Gas Utility’s cost of gas was $71.6 million in the 2006 three-month period compared to $54.6 million in the 2005 three-month period largely reflecting greater costs associated with the higher off-system sales and the impact of the higher retail core-market purchased gas costs.

Gas Utility total margin in the 2006 three-month period decreased $0.2 million reflecting decreased retail core-market margin principally resulting from the lower sales to retail core-market customers partially offset by higher total margin from interruptible customers reflecting higher interruptible unit margins.

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Gas Utility operating income decreased to $6.6 million in the 2006 three-month period from $7.7 million in the 2005 three-month period principally reflecting the $0.3 million decrease in total margin, slightly lower other income and higher depreciation and amortization expense. Total operating and administrative expenses were comparable to the prior-year period as higher uncollectible accounts and customer assistance program costs were largely offset by lower incentive compensation and distribution system expenses.

The decrease in Gas Utility income before income taxes reflects the previously mentioned decrease in operating income and an increase in interest expense. The increase in interest expense is principally attributable to higher short-term debt outstanding, largely reflecting the effects of higher natural gas prices and higher short-term interest rates.

Electric Utility:

For the three months ended June 30, (Millions of dollars)	2006		2005		Increase (Decrease)
Revenues (a)	$	22.9	$	22.0	$	0.9		4.1	%
Total margin (a) (b)	$	10.5	$	10.2	$	0.3		2.9	%
Operating income	$	5.2	$	4.9	$	0.3		6.1	%
Income before income taxes	$	4.6	$	4.4	$	0.2		4.5	%
Distribution sales - millions of kilowatt hours (“gwh”) (a)		222.4		222.5		(0.1	)	(0.0	)%

(a) Similar to Gas Utility, Electric Utility adjusted its method of estimating unbilled sales volumes and associated revenues for electricity consumed through the end of the month by more closely correlating such estimated sales volumes to distribution system sendout data. The change in the method of estimating unbilled sales resulted in a 1.6 gwh decrease in distribution system sales and associated decreases in Electric Utility revenues and total margin of $0.1 million for the 2006 three-month period.

(b) Total margin represents total revenues less total cost of sales and revenue-related taxes, i.e. Electric Utility gross receipts taxes, of $1.2 million in each of the three-month periods ended June 30, 2006 and 2005. For financial statement purposes, revenue-related taxes are included in “Utility taxes other than income taxes” on the Condensed Consolidated Statements of Income.

Electric Utility’s 2006 three-month period kilowatt-hour sales were comparable to the prior-year period. Electric Utility revenues increased by $0.9 million in the 2006 three-month period largely reflecting the effects of a 3% increase in its Provider of Last Resort (“POLR”) rates effective January 1, 2006. Electric Utility’s cost of sales increased to $11.2 million in the 2006 three-month period from $10.6 million in the 2005 three-month period reflecting higher per unit purchased power costs.

Electric Utility total margin in the 2006 three-month period increased $0.3 million principally reflecting lower 2006 three-month period transmission and congestion costs and the higher POLR rates partially offset by the higher per unit purchased power costs.

Operating income increased in the 2006 three-month period principally reflecting the increase in total margin. The increase in income before income taxes principally reflects the higher operating income partially offset by higher interest expense on short-term debt.

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Energy Services:

For the three months ended June 30, (Millions of dollars)	2006		2005		Increase (Decrease)
Revenues	$	268.7	$	290.6	$	(21.9	)	(7.5	)%
Total margin (a)	$	20.3	$	18.7	$	1.6		8.6	%
Operating income	$	10.4	$	10.6	$	(0.2	)	(1.9	)%
Income before income taxes	$	10.3	$	10.6	$	(0.3	)	(2.8	)%

(a) Total margin represents total revenues less total cost of sales.

Energy Services revenues decreased to $268.7 million in the 2006 three-month period from $290.6 million in the 2005 three-month period reflecting an approximate 17% decline in natural gas volumes sold and a 25% decline in propane volumes sold, slightly offset by increased electric generation revenues. The decline in natural gas and propane volumes sold reflects the effects of warmer spring weather conditions in Energy Services’ service territories and customer losses associated with, among other things, maintenance of our credit risk management policy in a high natural gas price environment.

Total margin increased $1.6 million in the 2006 three-month period compared to the prior-year three-month period. The increase in total margin is primarily attributed to higher margin contributed by electric generation and peaking supply and storage management activities partially offset by the effects of lower propane volumes sold.

The decrease in Energy Services operating income and income before income taxes principally reflects a $1.7 million increase in operating and administrative expenses. The increase in operating and administrative expenses primarily reflects increased costs associated with our electric generation business partially offset by a decrease in uncollectible accounts expense. As part of the consideration in the sale of our 50% ownership interest, Energy Ventures transferred its 48-megawatt coal-fired electric generation facility to UGID. As a result, UGID is no longer incurring cost of sales associated with purchasing a portion of its power needs from Energy Ventures, but is incurring operating and administrative expenses associated with the operation of the electric generation station.

2006 nine-month period compared to the 2005 nine-month period

AmeriGas Propane:

For the nine months ended June 30, (Millions of dollars)	2006			2005			Increase (Decrease)
Revenues	$	1,727.5		$	1,604.0		$	123.5		7.7	%
Total margin (a)	$	638.0		$	614.1		$	23.9		3.9	%
Partnership EBITDA (b)	$	229.1		$	208.0		$	21.1		10.1	%
Operating income	$	193.9		$	178.1		$	15.8		8.9	%
Retail gallons sold (millions)		804.4			857.5			(53.1	)	(6.2	)%
Degree days - % (warmer) colder than normal (c)		(10.3	)%		(6.1	)%		—		—

(a) Total margin represents total revenues less total cost of sales.

(b) Partnership EBITDA (earnings before interest expense, income taxes and depreciation and amortization) should not be considered as an alternative to net income (as an indicator of operating performance) or as an alternative to cash flow (as a measure of liquidity or ability to service debt obligations) and is not a measure of performance or financial condition under accounting principles generally accepted in the United States of America. Management uses Partnership EBITDA as the primary measure of segment profitability for the AmeriGas Propane segment (see Note 3 to the Condensed Consolidated Financial Statements).

(c) Deviation from average heating degree-days based upon national weather statistics provided by the National Oceanic and Atmospheric Administration (“NOAA”) for 335 airports in the United States, excluding Alaska.

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Temperatures during the 2006 nine-month period were 10.3% warmer than normal and 4.5% warmer than the prior-year period. Retail propane volumes sold decreased approximately 6% principally due to the warmer winter weather and the negative effects of customer conservation driven by continued high propane selling prices.

Retail propane revenues increased $108.4 million reflecting a $194.3 million increase due to higher average selling prices partially offset by an $85.9 million decrease due to the lower retail volumes sold. Wholesale propane revenues were comparable with the prior year reflecting a $22.5 million decrease due to lower volumes sold offset by a $21.7 million increase due to higher average selling prices. In the 2006 nine-month period, our average retail propane product cost per retail gallon sold was approximately 19% higher than in the 2005 nine-month period, which resulted in higher year-over-year prices to our customers. The average wholesale cost per gallon of propane at Mont Belvieu, one of the major propane supply points in the United States, was approximately 24% greater than the average cost per gallon during the 2005 nine-month period. Total cost of sales increased to $1,089.5 million in the 2006 nine-month period from $989.9 million in the 2005 nine-month period, primarily reflecting the increase in propane product costs partially offset by the decreased volumes sold. Total margin increased $23.9 million compared to the 2005 nine-month period due to increased customer pricing of propane and ancillary sales and services in response to increase in costs incurred.

Partnership EBITDA during the 2006 nine-month period was $229.1 million compared to $208.0 million during the 2005 nine-month period. This $21.1 million increase in Partnership EBITDA primarily reflects the previously mentioned increase in total margin and a $16.5 million decrease in the loss on the early extinguishment of debt from $33.6 million in the 2005 nine-month period to $17.1 million in the 2006 nine-month period. These changes were partially offset by an $11.1 million increase in operating and administrative expenses and an $8.2 million decrease in other income primarily reflecting the absence of the $9.1 million pre-tax gain on the sale of Atlantic Energy recognized during the 2005 nine-month period. The $17.1 million loss on the early extinguishment of debt that was incurred during the 2006 nine-month period was associated with the refinancings of AmeriGas OLP’s Series A and Series C First Mortgage Notes totaling $228.8 million and $59.6 million of the Partnership’s $60 million 10% Senior Notes with $350 million of 7.125% Senior Notes due 2016. The increase in operating and administrative expenses principally resulted from higher vehicle fuel and lease expense and higher employee compensation and benefits expenses. These increases were partially offset by a $5.9 million favorable net expense reduction related to general insurance, litigation and medical claims, primarily reflecting improved claims history.

Operating income increased $15.8 million reflecting the previously mentioned increase in total margin and a $2.0 million decrease in depreciation and amortization expense, largely offset by the previously mentioned increase in operating and administrative expenses and decrease in other income.

International Propane:

For the nine months ended June 30, (Millions of dollars)	2006		2005		Increase (Decrease)
Revenues	$	817.1	$	804.4	$	12.7		1.6	%
Total margin (a)	$	359.7	$	425.3	$	(65.6	)	(15.4	)%
Operating income	$	121.7	$	189.6	$	(67.9	)	(35.8	)%
Income before income taxes	$	102.8	$	162.3	$	(59.5	)	(36.7	)%
Antargaz retail gallons sold (millions)		272.1		289.6		(17.5	)	(6.0	)%
Antargaz total margin, millions of euros (a)	€	280.8	€	307.7		(€26.9	)	(8.7	)%

(a) Total margin represents total revenues less total cost of sales.

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Weather in Antargaz’ service territory was approximately 1% warmer than normal compared to 3% warmer than normal in the 2005 nine-month period. Flaga experienced colder than normal weather in the 2006 nine-month period compared to warmer than normal weather in the prior-year nine-month period. During the 2006 nine-month period, the monthly average currency translation rate was $1.22 per euro compared to $1.29 per euro in the 2005 nine-month period. Antargaz’ retail LPG volumes sold decreased to 272.1 million gallons from 289.6 million gallons in the 2005 nine-month period due in large part to the late onset of winter weather in December, lower agricultural volumes sold and customer conservation.

International Propane revenues increased during the 2006 nine-month period reflecting significantly higher retail LPG selling prices per gallon on lower retail gallons sold, largely offset by the effect of the stronger dollar versus the euro. Higher average LPG product cost per retail gallon sold than in the 2005 nine-month period resulted in higher year-over-year prices to our customers. International Propane’s total cost of sales increased to $457.4 million during the 2006 nine-month period from $379.1 million during the 2005 nine-month period reflecting the significantly higher LPG product costs partially offset by the effect of the stronger dollar.

Total International Propane margin declined $65.6 million in the 2006 nine-month period compared to the prior-year period primarily reflecting the absence of higher than normal LPG unit margin experienced in the prior year and approximately $29 million due to the negative currency translation effect of a stronger dollar. Antargaz’ total base currency margin declined €26.9 million reflecting the lower unit margins and, to a much lesser extent, lower volumes sold.

International Propane operating income declined $67.9 million in the 2006 nine-month period principally reflecting the decline in total margin, the absence of $19.9 million from the reversal of certain non-income related tax reserves which were recorded in the prior-year period (see discussion in “Antargaz Tax Matter”) partially offset by an approximate $15.0 million decrease in operating and administrative expenses and slight decreases in depreciation and amortization. These decreases reflect the effects of the stronger dollar versus the euro with only a modest decrease attributed to the Czech Republic and Slovakia operations being contributed to the Flaga JV. Antargaz’ total base-currency operating and administrative expenses were comparable with the 2005 nine-month period.

The decrease in income before income taxes principally reflects the decrease in operating income and a $1.4 million loss on early extinguishment of debt partially offset by changes in minority interest and lower interest expense. The changes in minority interest reflect the minority interest holder’s (in one of Antargaz’ subsidiaries) share of costs associated with the closure of a filling and distribution center, as previously mentioned.

Gas Utility:

For the nine months ended June 30, (Millions of dollars)	2006			2005			Increase (Decrease)
Revenues (a)	$	622.3		$	506.6		$	115.7		22.8	%
Total margin (a) (b)	$	167.8		$	168.1		$	(0.3	)	(0.2	)%
Operating income	$	82.2		$	84.4		$	(2.2	)	(2.6	)%
Income before income taxes	$	67.8		$	72.4		$	(4.6	)	(6.4	)%
System throughput - billions of cubic feet (“bcf”) (a)		64.4			69.2			(4.8	)	(6.9	)%
Degree days - % (warmer) than normal (c)		(8.8	)%		(0.7	)%		—		—

(a) Beginning in Fiscal 2006, Gas Utility adjusted its method of estimating unbilled throughput and associated revenues for service provided through the end of the month by more closely correlating such estimated throughput to

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distribution system sendout data. The Company believes that the new method of estimating unbilled throughput results in a more accurate quarterly estimate of unbilled revenues and associated total margin. The change in the method of estimating unbilled throughput did not have a material impact on Gas Utility’s throughput, revenues or margin for the 2006 nine-month period.

(b) Total margin represents total revenues less total cost of sales.

(c) Deviation from average heating degree days based upon weather statistics provided by the National Oceanic and Atmospheric Administration (“NOAA”) for 4 airports located within our service territory. The 2005 nine-month period degree day statistics have been restated to reflect the current-year, four-location average from the previous single location statistic.

Weather in Gas Utility’s service territory based upon heating degree days was 8.8% warmer than normal during the 2006 nine-month period and approximately normal in the prior-year nine-month period. Notwithstanding year-over-year growth in the number of our customers, total distribution system throughput decreased 4.8 bcf due to a decrease in sales to retail core-market customers reflecting the warmer weather and price-induced customer conservation, and lower volumes transported for firm and interruptible delivery service customers.

Gas Utility revenues increased $115.7 million during the 2006 nine-month period principally reflecting an $81.9 million increase in retail core-market revenues, the result of higher average PGC rates, and a $33.8 million increase in revenues from low-margin off-system sales. Gas Utility’s cost of gas was $454.5 million in the 2006 nine-month period compared to $338.5 million in the 2005 nine-month period reflecting the impact of the previously mentioned higher retail core-market purchased gas costs and greater costs associated with the higher off-system sales.

Gas Utility total margin in the 2006 nine-month period was comparable to the prior-year nine-month period as the decrease in retail core-market margin resulting from the lower sales was offset by higher total margin from interruptible customers and customer assistance tariff revenues.

Gas Utility operating income decreased $2.2 million in the 2006 nine-month period principally reflecting $0.9 million of increased depreciation and amortization expense, a $0.6 million decrease in other income and a $0.4 million increase in operating and administrative expenses. The increase in operating and administrative expenses reflects increased required environmental remediation reserves and higher uncollectible accounts and customer assistance expenses largely offset by lower 2006 nine-month period stock-based incentive compensation costs and lower distribution system maintenance expenses resulting, in large part, from the mild heating-season weather.

The decrease in Gas Utility income before income taxes reflects the previously mentioned decrease in operating income and an increase in interest expense attributable to higher short-term debt outstanding, largely reflecting the effects of higher natural gas prices, and higher short-term interest rates.

Electric Utility:

For the nine months ended June 30, (Millions of dollars)	2006		2005		Increase (Decrease)
Revenues (a)	$	72.2	$	69.9	$	2.3		3.3	%
Total margin (a) (b)	$	30.5	$	32.5	$	(2.0	)	(6.2	)%
Operating income	$	15.0	$	16.8	$	(1.8	)	(10.7	)%
Income before income taxes	$	13.1	$	15.3	$	(2.2	)	(14.4	)%
Distribution sales - millions of kilowatt hours (“gwh”)(b)		748.8		753.7		(4.9	)	(0.7	)%

(a) Similar to Gas Utility, Electric Utility adjusted its method of estimating unbilled sales volumes and associated revenues for electricity consumed through the end of the month by more closely correlating such estimated sales volumes to distribution system sendout data. The change in the method of estimating unbilled sales volumes did not have a material effect on sales, revenues or margin for the 2006 nine-month period.

(b) Total margin represents total revenues less total cost of sales and revenue-related taxes, i.e. Electric Utility gross receipts taxes, of $4.0 million and $3.9 million in the nine-month periods ended June 30, 2006 and 2005, respectively. For

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financial statement purposes, revenue-related taxes are included in “Utility taxes other than income taxes” on the Condensed Consolidated Statements of Income.

Electric Utility’s 2006 nine-month period kilowatt-hour sales decreased 0.7% compared to the prior-year period. Electric Utility revenues increased $2.3 million in the 2006 nine-month period largely reflecting higher POLR electric generation rates partially offset by the effects of the lower sales. Electric Utility’s cost of sales increased to $37.7 million in the 2006 nine-month period from $33.5 million in the 2005 nine-month period reflecting higher per unit purchased power costs partially offset by the effects of lower sales.

Electric Utility total margin in the 2006 nine-month period decreased $2.0 million compared to the 2005 nine-month period principally reflecting the higher per unit purchased power costs partially offset by the increase in POLR electric generation rates.

Operating income decreased in the 2006 nine-month period principally reflecting the decrease in total margin partially offset by slightly lower operating and administrative expenses. The decrease in income before income taxes principally reflects the lower operating income and higher interest expense on short-term debt.

Energy Services:

For the nine months ended June 30, (Millions of dollars)	2006		2005		Increase
Revenues	$	1,158.9	$	1,051.8	$	107.1	10.2	%
Total margin (a)	$	65.4	$	56.8	$	8.6	15.1	%
Operating income	$	44.7	$	30.7	$	14.0	45.6	%
Income before income taxes	$	44.6	$	30.7	$	13.9	45.3	%

(a) Total margin represents total revenues less total cost of sales.

Energy Services revenues increased $107.1 million in the 2006 nine-month period compared to the 2005 nine-month period. Revenues generated by Energy Services’ natural gas and oil marketing business increased approximately $81 million in the 2006 nine-month period despite a 26% decrease in natural gas volumes sold reflecting the effects of higher natural gas product costs. The decline in natural gas volumes sold reflects the effects of warmer weather conditions in Energy Services’ service territories and customer losses associated with, among other things, maintenance of our credit risk management policy in a high natural gas price environment. Asset Management provided approximately $20 million in higher revenues largely reflecting higher propane product costs and, to a lesser extent, sales associated with the full-period ownership of its propane terminal. The terminal was purchased in November 2004. The remaining increase in revenues is attributed to our electric generation marketing activities.

Total margin increased $8.6 million in the 2006 nine-month period compared to the prior-year nine-month period. The increase in total margin is primarily attributed to higher margin from electric generation, peaking supply and storage management activities, and propane terminal operations, partially offset by lower natural gas margin attributed to the lower natural gas volumes sold.

The increase in Energy Services operating income and income before income taxes principally reflects a $9.1 million gain on the sale of its 50% ownership interest in Energy Ventures in March 2006 and the previously mentioned increase in total margin partially offset by $2.6 million higher operating and administrative expenses and $0.5 million higher depreciation and amortization expense. The increase in operating and administrative expenses principally reflects increased operating expenses associated with electric generation partially offset by a decrease in uncollectible accounts expense.

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FINANCIAL CONDITION AND LIQUIDITY

Financial Condition

Our cash, cash equivalents and short-term investments totaled $407.6 million at June 30, 2006 compared with $385.0 million at September 30, 2005. Excluding cash, cash equivalents and short-term investments that reside at UGI’s operating subsidiaries at June 30, 2006 and September 30, 2005, we have $250.3 million and $138.7 million, respectively, of cash, cash equivalents and short-term investments.

The Company’s long-term debt outstanding at June 30, 2006 totaled $1,721.3 million (including current maturities of $78.6 million) compared to $1,644.5 million of long-term debt (including current maturities of $252.0 million) at September 30, 2005.

AmeriGas OLP’s Credit Agreement expires on October 15, 2008 and consists of (1) a $100 million Revolving Credit Facility and (2) a $75 million Acquisition Facility. The Revolving Credit Facility may be used for working capital and general purposes of AmeriGas OLP. The Acquisition Facility provides AmeriGas OLP with the ability to borrow up to $75 million to finance the purchase of propane businesses or propane business assets or, to the extent it is not so used, for working capital and general purposes, subject to restrictions in the AmeriGas Partners Senior Notes indentures. At June 30, 2006, there were no borrowings outstanding under the Credit Agreement. Issued and outstanding letters of credit under the Revolving Credit Facility, which reduce the amount available for borrowings, totaled $58.9 million at June 30, 2006 and was approximately the same amount outstanding during the entire nine-month period ended June 30, 2006. AmeriGas OLP’s short-term borrowing needs are seasonal and are typically greatest during the fall and winter heating-season months due to the need to fund higher levels of working capital. Due in part to the issuance of 2.3 million Common Units in September 2005, during the 2006 nine-month period generally, the Partnership did not need to use its Revolving Credit Facility to fund its operations. During the nine months ended June 30, 2005, the average daily borrowings outstanding under the Credit Agreement were $32.0 million and the peak borrowings outstanding were $98.0 million. AmeriGas Partners has an effective unallocated debt and equity shelf registration statement with the U.S. Securities and Exchange Commission (“SEC”) under which it may issue Common Units or Senior Notes due 2016 in underwritten public offerings.

In January 2006, the Partnership and AP Eagle Finance Corp. issued $350 million of 7.125% Senior Notes due 2016. The proceeds of this registered public debt offering were used to refinance AmeriGas OLP’s $160 million Series A and $68.8 million Series C First Mortgage Notes, including a make-whole premium, its $35 million term loan due October 1, 2006 and $59.6 million of the Partnership’s $60 million 10% Senior Notes due 2006 pursuant to a tender offer, plus a premium. UGI incurred a pre-tax loss on extinguishment of debt associated with the refinancings of approximately $17.1 million ($4.6 million after-tax).

On December 7, 2005, Antargaz executed a new five-year, floating rate Senior Facilities Agreement with a major French bank providing for a €380 million term loan and a €50 million revolving credit facility which expires March 31, 2011. At June 30, 2006, there were no borrowings outstanding under the revolver. The proceeds of the term loan were used in December 2005 to repay immediately the existing €175 million Senior Facilities term loan, to fund the redemption of the €165 million High Yield Bonds in January 2006, including a premium, and for general corporate purposes. As a result of this refinancing, we incurred a pre-tax loss on extinguishment of debt of $1.4 million ($0.9 million

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after-tax). In addition, AGZ executed interest rate swap agreements with the same bank to fix the rate of interest on the term loan for the duration of the loan at a rate of approximately 3.25%, plus a margin.

At June 30, 2006, Flaga had approximately $54.4 million of long-term debt maturing during 2006. On July 26, 2006, Flaga entered into a euro-based term loan facility in the amount of €48 million ($61.4 million) and a working capital facility of up to €8 million. These facilities are subject to guarantees by UGI. In addition, on July 26, 2006, the Flaga JV entered into a multi-currency working capital facility of up to €8 million which is also subject to guarantees by UGI.

UGI Utilities has revolving credit agreements under which it may borrow up to a total of $110 million. These agreements expire in June 2007 through June 2008. From time to time, UGI Utilities makes short-term borrowings under uncommitted arrangements with major banks in order to meet liquidity needs. At June 30, 2006, UGI Utilities had $20 million in short-term borrowings outstanding under these uncommitted arrangements and $92.1 million in borrowings outstanding under the revolving credit agreements. Short-term borrowings, including borrowings under revolving credit agreements, are classified as bank loans on the Condensed Consolidated Balance Sheets. During the nine months ended June 30, 2006 and 2005, average daily bank loan borrowings were $111.8 million and $50.4 million, respectively, and peak bank loan borrowings totaled $175.9 million and $90.4 million, respectively. The increase in average and peak bank loan borrowings during the 2006 nine-month period reflects, in large part, borrowings to fund increased working capital resulting principally from higher natural gas prices. UGI Utilities expects to increase its revolving credit agreement commitments to $350 million prior to September 30, 2006. The size of the increase takes into account expected working capital requirements of PG Energy (see “PG Energy Acquisition” described below). UGI Utilities also has an effective shelf registration statement with the SEC under which it may issue up to an additional $75 million of Medium-Term Notes or other debt securities.

Energy Services has a $150 million receivables purchase facility (“Receivables Facility”) with an issuer of receivables-backed commercial paper expiring in April 2009. In order to provide additional short-term liquidity during the peak heating season due to increased energy product costs, the maximum level of funding available at any one time from this facility was temporarily increased to $300 million for the period from November 1, 2005 to April 24, 2006. The fees associated with temporarily increasing the maximum level of funding were not material. After April 24, 2006, the maximum level of funding available at any one time from this facility is $150 million. Under the Receivables Facility, Energy Services transfers, on an ongoing basis and without recourse, its trade accounts receivable to its wholly owned, special purpose subsidiary, Energy Services Funding Corporation (“ESFC”), which is consolidated for financial statement purposes. ESFC, in turn, has sold, and subject to certain conditions, may from time to time sell, an undivided interest in some or all of the receivables to a commercial paper conduit of a major bank. The proceeds of these sales are less than the face amount of the accounts receivable sold by an amount that approximates the purchaser’s financing cost of issuing its own receivables-backed commercial paper. ESFC was created and has been structured to isolate its assets from creditors of Energy Services and its affiliates, including UGI. This two-step transaction is accounted for as a sale of receivables following the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.” Energy Services continues to service, administer and collect trade receivables on behalf of the commercial paper issuer and ESFC. At June 30, 2006, the outstanding balance of ESFC receivables was $30.2 million which is net of $42.0 million in trade receivables sold to the commercial paper conduit.

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In addition, a major bank has committed to Energy Services to issue up to $50 million of standby letters of credit, secured by cash or marketable securities (“LC Facility”). At June 30, 2006, there were no letters of credit outstanding. Energy Services expects to fund the collateral requirements with borrowings under its Receivables Facility. The LC Facility expires in April 2007.

Cash Flows

Operating Activities. Due to the seasonal nature of the Company’s businesses, cash flows from operating activities are generally strongest during the second and third fiscal quarters when customers pay for natural gas, propane and other LPG and electricity consumed during the heating season months. Conversely, operating cash flows are generally at their lowest levels during the first and fourth fiscal quarters when the Company’s investment in working capital, principally accounts receivable and/or inventories, is generally greatest. AmeriGas Propane and UGI Utilities primarily use revolving credit facilities and Energy Services uses its Receivables Facility to satisfy their seasonal operating cash flow needs. Antargaz has historically been successful funding its operating cash flow needs without the use of its revolver.

Cash flow provided by operating activities was $193.0 million in the 2006 nine-month period compared to $316.7 million in the 2005 nine-month period. Cash flow from operating activities before changes in operating working capital was $404.4 million in the 2006 nine-month period compared with $406.6 million in the prior-year nine-month period. Changes in operating working capital used $211.4 million in the 2006 nine-month period and $89.9 million in the 2005 nine-month period. The greater cash requirements to fund working capital reflect, in part, the effects of higher energy commodity prices.

Investing Activities. Investing activity cash flow is principally affected by capital expenditures and investments in property, plant and equipment, cash paid for acquisitions of businesses, changes in short-term investments and proceeds from sales of assets. Net cash used in investing activities was $165.6 million in the 2006 nine-month period compared to $138.0 million in the prior-year period. The increase in investing activities largely reflects our increased investments in short-term investments, our international operations and property, plant and equipment partially offset by the net proceeds received from Energy Services’ sale of its 50% ownership interest in Energy Ventures in March 2006 and lower AmeriGas Propane acquisition activity.

Financing Activities. Cash flow used by financing activities was $54.9 million in the 2006 nine-month period compared with $113.7 million of cash used in the prior-year nine-month period. Financing activity cash flow changes are primarily due to issuances and repayments of long-term debt, net borrowings under revolving credit facilities, dividends and distributions on UGI Common Stock and AmeriGas Partners Common Units, and proceeds from public offerings of AmeriGas Partners Common Units and issuances of UGI common stock. In December 2005, Antargaz entered into a €380 million term loan. The proceeds were used to repay the existing €175 million Senior Facilities term loan, redeem its €165 million of High Yield Bonds and for general corporate purposes. Antargaz incurred a $1.4 million loss on extinguishment of debt associated with its refinancings. Also, in December 2005, UGI Utilities refinanced $50 million of its maturing 7.14% Medium-Term Notes with the proceeds from the issuance of $50 million of 5.64% Medium-Term Notes. In January 2006, the Partnership and AP Eagle Finance Corp. issued $350 million of 7.125% Senior Notes due 2016. The proceeds of this registered public debt offering were used to refinance AmeriGas OLP’s $160 million Series A and $68.8 million Series C First Mortgage Notes, including a make-whole premium, its $35 million term loan due October 1, 2006 and $59.6 million of the Partnership’s $60 million 10% Senior Notes due 2006 pursuant to a tender offer, plus a premium. The Partnership incurred a $17.1 million loss on early extinguishment of debt associated with these refinancings. UGI Utilities’ net bank loan borrowings during the 2006 nine-month period include repayments of two $35 million borrowings with maturities greater than three months and a $20 million borrowing made on June 1, 2006, which matures on September 8, 2006.

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We paid cash dividends on UGI Common Stock of $54.1 million and $49.9 million during the nine months ended June 30, 2006 and 2005, respectively. During the nine months ended June 30, 2006, the Partnership declared and paid quarterly distributions on its limited partner units for the quarters ended March 31, 2006, December 31, 2005 and September 30, 2005. On April 24, 2006, AmeriGas Propane’s Board of Directors approved an increase in its quarterly distribution rate on AmeriGas Partners Common Units to $0.58 per Common Unit ($2.32 annually) from $0.56 per Common Unit ($2.24 annually). The quarterly distribution of $0.58 for the quarter ended June 30, 2006 will be paid on August 18, 2006 to holders of record on August 10, 2006.

UGI Common Dividend Increase

On April 25, 2006, UGI’s Board of Directors approved an increase in the quarterly dividend rate on UGI Common Stock to $0.17625 per share or $0.705 per common share on an annual basis. The new quarterly dividend was effective with the dividend payable on July 1, 2006 to shareholders of record on June 15, 2006. On July 25, 2006, UGI’s Board of Directors declared a quarterly dividend on UGI Common Stock of $0.17625 per common share payable on October 1, 2006 to shareholders of record on September 15, 2006.

Antargaz Tax Matter

The French tax authorities levy taxes on legal entities and individuals regularly operating a business in France which are commonly referred to collectively as “business tax.” The amount of business tax charged annually is generally dependent upon the value of certain of the entity’s tangible fixed assets. Prior to the Antargaz Acquisition, Antargaz filed suit against French tax authorities in connection with the assessment of business tax related to the tax treatment of certain of its owned tanks at customer locations. Elf Antar France and Elf Aquitaine, now Total France, former owners of Antargaz, agreed to indemnify Antargaz for all payments that would have been due from Antargaz in respect of the tax related to its tanks for the period from January 1, 1997 through December 31, 2000. Antargaz has recorded liabilities for business taxes related to various classes of equipment. On February 4, 2005, Antargaz received a letter that was issued by the French government to the French Committee of Butane and Propane (“CFBP”), a butane/propane industry group, concerning the business tax, that eliminated the requirement for Antargaz to pay business tax associated with tanks at certain customer locations. In addition, during Fiscal 2005, resolution was reached relating to business taxes relating to a prior year. Further changes in the French government’s interpretation of the tax laws or in the tax laws themselves could have either an adverse or a favorable effect on our results of operations. Our Condensed Consolidated Statements of Income for the nine months ended June 30, 2005 include a pre-tax gain of $19.9 million and a net after-tax gain of $14.9 million associated with the resolution of certain business tax matters related principally to prior years.

PG Energy Acquisition

On January 26, 2006, UGI signed a definitive agreement to acquire the natural gas utility assets of PG Energy from Southern Union Company for approximately $580 million in cash, subject to certain adjustments. We expect the acquisition to be funded with a combination of debt and existing cash. PG Energy serves approximately 158,000 customers in 13 counties in northeastern and central Pennsylvania. The

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proposed transaction is subject to PUC approval and is expected to close during our fourth fiscal quarter ending September 30, 2006. We anticipate that UGI Utilities will acquire and operate, through a subsidiary, the regulated assets of PG Energy immediately following completion of the acquisition.

Flaga Joint Venture

On February 15, 2006, Flaga entered into a joint venture with a subsidiary of Progas GmbH & Co KG (“Progas”) to create a company for the retail distribution of LPG in central and eastern Europe. Headquartered in Dortmund, Germany, Progas is controlled by Thyssen’sche Handelsgesellschaft m.b.H. The joint venture company, Zentraleuropa LPG Holding (the “Flaga JV”), an Austrian limited liability company, through its subsidiaries engages in the retail distribution of LPG in the Czech Republic, Hungary, Poland, Slovakia and Romania. In forming the joint venture, Flaga contributed the shares of its LPG subsidiaries operating in the Czech Republic and Slovakia to the Flaga JV and paid cash of €9.1 million to Progas. Progas contributed the shares of its LPG subsidiaries operating in the Czech Republic, Hungary, Poland, Romania, and Slovakia to the Flaga JV. These LPG operating subsidiaries distributed approximately 77 million gallons of LPG in these five countries in 2005. The Flaga JV is owned and controlled equally by Flaga and Progas. In a related transaction, Flaga purchased Progas’ retail LPG business in Austria.

Recently Issued Accounting Pronouncements

In March 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 156, “Accounting for Servicing of Financial Assets - An Amendment of FASB Statement No. 140” (“SFAS 156”). We are currently evaluating the impact that the adoption of SFAS 156 will have on our financial position or results of operations. See Note 1 to the Condensed Consolidated Financial Statements for additional information.

In June 2006, the FASB issued Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes,” which clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with FASB Statement No. 109, “Accounting for Income Taxes.” We are currently evaluating the impact that this standard will have on our financial position or results of operations. See Note 1 to the Condensed Consolidated Financial Statements for additional information.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our primary market risk exposures are (1) market prices for propane and other LPG, natural gas and electricity; (2) changes in interest rates; and (3) foreign currency exchange rates.

The risk associated with fluctuations in the prices the Partnership and our International Propane operations pay for LPG is principally a result of market forces reflecting changes in supply and demand for propane and other energy commodities. Their profitability is sensitive to changes in LPG supply costs. Increases in supply costs are generally passed on to customers. International Propane and the Partnership may not, however, always be able to pass through product cost increases fully or on a timely basis, particularly when product costs rise rapidly. In order to reduce the volatility of LPG market price risk, the Partnership uses contracts for the forward purchase or sale of propane, propane fixed-price supply agreements, and over-the-counter derivative commodity instruments including price swap and option contracts and Antargaz hedges a portion of its future U.S. dollar denominated LPG product purchases through the use of forward foreign exchange contracts. Antargaz may also enter into other contracts, similar to those used by the Partnership. Flaga has and may use derivative commodity instruments to reduce market risk associated with a portion of its propane purchases. Over-the-counter

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derivative commodity instruments utilized to hedge forecasted purchases of propane are generally settled at expiration of the contract. In order to minimize credit risk associated with its derivative commodity contracts, the Partnership monitors established credit limits with the contract counterparties. Although we use derivative financial and commodity instruments to reduce market price risk associated with forecasted transactions, we do not use derivative financial and commodity instruments for speculative or trading purposes.

Gas Utility’s tariffs contain clauses that permit recovery of substantially all of the prudently incurred costs of natural gas it sells to its customers. The recovery clauses provide for periodic adjustments for the difference between the total amounts actually collected from customers through PGC rates and the recoverable costs incurred. Because of this ratemaking mechanism, there is limited commodity price risk associated with our Gas Utility operations. Gas Utility uses exchange-traded natural gas call option contracts to reduce volatility in the cost of gas it purchases for its retail core-market customers. The cost of these call option contracts, net of any associated gains, is included in Gas Utility’s PGC recovery mechanism.

Electric Utility purchases power from wholesale electricity suppliers under fixed-price energy and capacity contracts and, to a much lesser extent, on the spot market, to provide retail POLR electric generation service to its customers that do not elect to receive such service from alternate suppliers. Currently, the rates it may charge its customers for POLR service are set at or below certain levels established in settlements approved by the PUC. Under a settlement approved in 2004, Electric Utility increased its POLR rates for all metered customers by a total of 4.5% effective January 2005 and an additional 3% effective January 2006, above the total rates in effect on December 31, 2004. In June 2006, the PUC approved a settlement permitting system average increases in maximum POLR rates, on a total bill basis, of 37.8% for 2007, and additional increases of 5.7% and 1.1% for 2008 and 2009, respectively. Wholesale prices for electricity can be volatile, especially during periods of high demand or tight supply. Currently, Electric Utility’s fixed-price power and capacity contracts with electricity suppliers mitigate a substantial portion of its commodity price risk associated with POLR service rate limits in effect through December 31, 2009. With respect to its existing fixed-price power and capacity contracts, should any of the counterparties fail to provide electric power or capacity under the terms of such contracts, any increases in the cost of replacement power or capacity could negatively impact Electric Utility results. In order to reduce the risk associated with non-performance, Electric Utility has diversified its purchases across several suppliers and entered into bilateral collateral arrangements with certain of them. From time to time, Electric Utility enters into electric price swap agreements to reduce the volatility in the cost of a portion of its anticipated electricity requirements.

In order to manage market price risk relating to substantially all of Energy Services’ fixed-price sales contracts for natural gas, Energy Services purchases exchange-traded natural gas futures contracts or enters into fixed-price supply arrangements. Exchange-traded natural gas futures contracts are guaranteed by the New York Mercantile Exchange (“NYMEX”) and have nominal credit risk. The change in market value of these contracts generally requires daily cash deposits in margin accounts with brokers. At June 30, 2006, Energy Services had $7.3 million deposited into such margin accounts. Although Energy Services’ fixed-price supply arrangements mitigate most risks associated with its fixed-price sales contracts, should any of the natural gas suppliers under these arrangements fail to perform, increases, if any, in the cost of replacement natural gas would adversely impact Energy Services’ results. In order to reduce this risk of supplier nonperformance, Energy Services has diversified its purchases across a number of suppliers.

UGID has entered into fixed-price sales agreements for a portion of the electricity expected to be generated by its electric generation assets. In conjunction with certain of these sales agreements, at June

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30, 2006, UGID had $3.8 million in collateral deposits held by its counterparties which amount is reflected in other assets on the Consolidated Balance Sheet. In the event that these generation assets would not be able to produce all of the electricity needed to supply electricity under these agreements, UGID would be required to purchase such electricity on the spot market or under contract with other electricity suppliers. Accordingly, increases in the cost of replacement power could negatively impact the Company’s results.

Asset Management has and may continue to enter into fixed-price sales agreements for a portion of its propane sales. In order to manage the market price risk relating to substantially all of its fixed-price sales contracts for propane, Asset Management enters into price swap and option contracts.

We have both fixed-rate and variable-rate debt. Changes in interest rates impact the cash flows of variable-rate debt but generally do not impact its fair value. Conversely, changes in interest rates impact the fair value of fixed-rate debt but do not impact their cash flows.

Our variable-rate debt includes borrowings under AmeriGas OLP’s Credit Agreement, borrowings under UGI Utilities’ revolving credit agreements and a substantial portion of Flaga’s debt. These debt agreements have interest rates that are generally indexed to short-term market interest rates. At June 30, 2006, combined borrowings outstanding under these agreements totaled approximately $181.8 million. Antargaz has effectively fixed the interest rate on its variable-rate debt through June 2011 through the use of interest rate swaps. Our long-term debt is typically issued at fixed rates of interest based upon market rates for debt having similar terms and credit ratings. As these long-term debt issues mature, we may refinance such debt with new debt having interest rates reflecting then-current market conditions. This debt may have an interest rate that is more or less than the refinanced debt. In order to reduce interest rate risk associated with near to medium term forecasted issuances of fixed-rate debt, from time to time we enter into interest rate protection agreements.

The following table summarizes the fair values of unsettled market risk sensitive derivative instruments held at June 30, 2006. Fair values reflect the estimated amounts that we would receive or pay to terminate the contracts at the reporting date based upon quoted market prices of comparable contracts at June 30, 2006. The table also includes the changes in fair value that would result if there were a ten percent adverse change in (1) the market price of propane; (2) the market price of natural gas; (3) the market price of electricity; (4) interest rates on ten-year U.S. treasury notes and the three-month Euribor and; (5) value of the euro versus the U.S. dollar.

(Millions of dollars)	Fair Value			Change in Fair Value
June 30, 2006:
Propane commodity price risk	$	18.1		$	(18.9	)
Natural gas commodity price risk		(6.0	)		(10.4	)
Electricity commodity price risk		6.7			(1.4	)
Interest rate risk		19.6			(18.7	)
Foreign currency exchange rate risk		(1.1	)		(19.2	)

Gas Utility’s exchange-traded natural gas call option contracts are excluded from the table above because any associated net gains are included in Gas Utility’s PGC recovery mechanism. Because our derivative instruments generally qualify as hedges under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” (“SFAS 133”), we expect that changes in the fair value of derivative instruments used to manage commodity or interest rate market risk would be substantially offset by gains or losses on the associated anticipated transactions.

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Our primary exchange rate risk is associated with the U.S. dollar versus the euro. The U.S. dollar value of our foreign-denominated assets and liabilities will fluctuate with changes in the associated foreign currency exchange rates. We use derivative instruments to hedge portions of our net investments in foreign subsidiaries (“net investment hedges”). Realized gains or losses remain in other comprehensive income until such foreign operations are liquidated. At June 30, 2006, the fair value of unsettled net investment hedges was a loss of $0.8 million, which is included in the foreign currency exchange rate risk in the table above. With respect to our net investments in Flaga and Antargaz, a 10% decline in the value of the euro versus the U.S. dollar, excluding the effects of any net investment hedges, would reduce their aggregate net book value by approximately $50.7 million, which amount would be reflected in other comprehensive income.

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ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures as of the end of the period covered by this report were designed and functioning effectively to provide reasonable assurance that the information required to be disclosed by the Company in reports filed under the Securities Exchange Act of 1934, as amended, is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure.

(b) Change in Internal Control over Financial Reporting

No change in the Company’s internal control over financial reporting occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Charleston, South Carolina Gas Plant Matter. By letter dated July 14, 2006, SCANA Corporation (“SCANA”), demanded contribution from UGI Utilities for a portion of past and future remediation costs related to the operations of a former MGP located in Charleston, South Carolina. According to the letter, the plant operated from 1855 to 1954. SCANA alleges that UGI Utilities controlled operations of the plant from 1910 to 1926. SCANA asserts that it has spent approximately $22 million in remediation costs and $26 million in third-party claims relating to the site. It estimates that future remediation costs could be as high as $2.5 million and asserts that it has received a demand from the United States Justice Department for natural resource damages. SCANA claims that UGI Utilities is liable for 47% of the costs associated with the site. UGI Utilities is in the process of reviewing the information provided by SCANA and is investigating this claim.

City of Bangor, Maine v. Citizens Communications Co. In April 2003, Citizens Communications Company (“Citizens”) served a complaint naming UGI Utilities as a third-party defendant in a civil action pending in the United States District Court for the District of Maine. In that action, the plaintiff, City of Bangor, Maine (“City”), sued Citizens to recover environmental response costs associated with MGP wastes generated at a plant allegedly operated by Citizens’ predecessors at a site on the Penobscot River. Citizens subsequently joined UGI Utilities and ten other third-party defendants alleging that the third-party defendants are responsible for an equitable share of costs Citizens may be required to pay to the City for cleaning up tar deposits in the Penobscot River. Citizens alleges that UGI Utilities and its predecessors owned and operated the plant from 1901 to 1928. Studies conducted by the City and Citizens suggest that it could cost up to $18 million to clean up the river. Citizens’ third-party claims have been stayed pending a resolution of the City’s suit against Citizens, which was tried in September 2005. Maine’s Department of Environmental Protection (“DEP”) informed UGI Utilities in March of 2005 that it considers UGI Utilities to be a potentially responsible party for costs incurred by the State of Maine related to gas plant contaminants at this site. On June 27, 2006, the court issued an order finding Citizens responsible for 60% of the cleanup costs. The amount of Citizens’ liability has not been finally determined. UGI Utilities believes that it has good defenses to Citizens’ claim and to any claim that the DEP may bring to recover its costs, and is defending the Citizens’ suit.

Sag Harbor, New York Matter. By letter dated June 24, 2004, KeySpan Energy (“KeySpan”) informed UGI Utilities that KeySpan has spent $2.3 million and expects to spend another $11 million to clean up an MGP site it owns in Sag Harbor, New York. KeySpan believes that UGI Utilities is responsible for approximately 50% of these costs as a result of UGI Utilities’ alleged direct ownership and operation of the plant from 1885 to 1902. By letter dated June 6, 2006, KeySpan reported that the New York Department of Environmental Conservation has approved a remedy for the site that is estimated to cost approximately $10 million. KeySpan believes that the cost could go as high as $20 million. UGI Utilities is in the process of reviewing the information provided by KeySpan and is investigating this claim.

ITEM 1A. RISK FACTORS

In addition to the information presented below and the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2005, which could materially affect our business, financial condition or future results. The risks described below and in our Annual Report on Form 10-K are not the only risks facing the Company. Other unknown or unpredictable factors could also have material adverse effects on future results.

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THE EXPANSION OF OUR INTERNATIONAL BUSINESS MEANS THAT WE WILL FACE INCREASED RISKS, WHICH MAY NEGATIVELY AFFECT OUR BUSINESS RESULTS.

Our acquisition of Antargaz in March of 2004 significantly increased our international presence. As we continue to grow as a multi-national corporation, with subsidiaries around the world, we face risks in doing business abroad that we do not face domestically. Certain aspects inherent in transacting business internationally could negatively impact our operating results, including:

• costs and difficulties in staffing and managing international operations;

• tariffs and other trade barriers;

• difficulties in enforcing contractual rights;

• longer payment cycles;

• local political and economic conditions;

• potentially adverse tax consequences, including restrictions on repatriating earnings and the threat of “double taxation”;

• fluctuations in currency exchange rates, which can affect demand and increase our costs; and

• regulatory requirements and changes in regulatory requirements, including French and EU competition laws that may adversely affect the terms of contracts with customers, and new environmental requirements that have led to stricter regulations of LPG storage sites in France.

On June 14, 2005, officials from France’s General Division of Competition, Consumption and Fraud Punishment (“DGCCRF”) conducted an unannounced inspection of, and obtained documents from, Antargaz’ headquarters building. Management believes that the DGCCRF performed similar unannounced inspections and document seizures at the locations of other distributors of LP gas in France, as well as at the industry association, Comite Francais du Butane et du Propane (“CFBP”). The investigation apparently seeks evidence of unlawful anticompetitive activities affecting the packaged LP gas (i.e., cylinder) business in northern France. Management intends to cooperate with the investigation, if it should receive any further inquiries.

In an apparently unrelated matter, on October 17, 2005, the DGCCRF, with Antargaz’ knowledge and cooperation, interviewed Antargaz’ director of supply and director of logistics regarding the purchase of LP gas by Antargaz, and Antargaz’ distribution network. The agency’s questions appeared to focus solely on the auto gas (i.e., motor fuel) market in France. The DGCCRF indicated at that time that it also intended to interview other industry participants (the agency interviewed CFBP on the same topic in January of 2006). The agency also indicated that it should not require any further interviews of Antargaz personnel and no further inquiries have been received regarding this matter.

Antargaz has not been notified that it is the subject of an investigation by the DGCCRF. In the event Antargaz were found to have violated the competition laws in France, it would be subject to civil penalties up to a maximum of ten percent (10%) of the total revenues of UGI.

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ITEM 6. EXHIBITS

The exhibits filed as part of this report are as follows (exhibits incorporated by reference are set forth with the name of the registrant, the type of report and registration number or last date of the period for which it was filed, and the exhibit number in such filing):

Exhibit No.	Exhibit	Registrant	Filing	Exhibit
10.1	Description of UGI Corporation Senior Executive Employee Severance Pay Plan, amended July 25, 2006
10.2	Description of July 25, 2006 Amendment to the UGI Corporation Supplemental Executive Retirement Plan
10.3	Description of AmeriGas Propane, Inc. Executive Employee Severance Pay Plan, amended July 24, 2006	AmeriGas Partners, L.P.	Form 10-K (8/8/06)	10.1
10.4	Description of AmeriGas Propane, Inc. Supplemental Executive Retirement Plan, amended July 24, 2006	AmeriGas Partners, L.P.	Form 10-K (8/8/06)	10.2
10.5	Guarantee Agreement, dated July 26, 2006, between UGI Corporation, as Guarantor, and Raiffeisen Zentralbank Osterreich Aktiengesellschaft (“RZB”), as Beneficiary, relating to the Multi Currency Working Capital Facility dated July 26, 2006 between Zentraleuropa LPG Holding GmbH (“ZLH”) and RZB
10.6	Guarantee Agreement, dated July 26, 2006, between UGI Corporation, as Guarantor, and RZB, as Beneficiary, relating to the Working Capital Facility dated July 26, 2006 between Flaga GmbH (“Flaga”) and RZB
10.7	Guarantee Agreement, dated July 26, 2006, between UGI Corporation, as Guarantor, and RZB, as Beneficiary, relating to the Term Loan Agreement dated July 26, 2006 between Flaga and RZB
10.8	Term Loan Agreement, dated July 26, 2006, between Flaga, as Borrower, and RZB, as Lender
10.9	Working Capital Facility Agreement, dated July 26, 2006, between Flaga, as Borrower, and RZB, as Lender
10.10	Multi Currency Working Capital Facility Agreement, dated July 26, 2006, between ZLH, as Borrower, and RZB, as Lender

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Exhibit No.	Exhibit	Registrant	Filing	Exhibit
31.1	Certification by the Chief Executive Officer relating to the Registrant’s Report on Form 10-Q for the quarter ended June 30, 2006, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by the Chief Financial Officer relating to the Registrant’s Report on Form 10-Q for the quarter ended June 30, 2006, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification by the Chief Executive Officer and the Chief Financial Officer relating to the Registrant’s Report on Form 10-Q for the quarter ended June 30, 2006, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	UGI Corporation (Registrant)
Date: August 8, 2006	By:	/s/ Anthony J. Mendicino
	Anthony J. Mendicino Senior Vice President-Finance and Chief Financial Officer

Date: August 8, 2006	By:	/s/ Michael J. Cuzzolina
	Michael J. Cuzzolina Vice President-Accounting and Financial Control and Chief Risk Officer

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EXHIBIT INDEX

10.1	Description of UGI Corporation Senior Executive Employee Severance Pay Plan, amended July 25, 2006.
10.2	Description of July 25, 2006 Amendment to the UGI Corporation Supplemental Executive Retirement Plan.
10.5	Guarantee Agreement, dated July 26, 2006, between UGI Corporation, as Guarantor, and Raiffeisen Zentralbank Osterreich Aktiengesellschaft (“RZB”), as Beneficiary, relating to the Multi Currency Working Capital Facility dated July 26, 2006 between Zentraleuropa LPG Holding GmbH (“ZLH”) and RZB.
10.6	Guarantee Agreement, dated July 26, 2006, between UGI Corporation, as Guarantor, and RZB, as Beneficiary, relating to the Working Capital Facility dated July 26, 2006 between Flaga GmbH (“Flaga”) and RZB.
10.7	Guarantee Agreement, dated July 26, 2006, between UGI Corporation, as Guarantor, and RZB, as Beneficiary, relating to the Term Loan Agreement dated July 26, 2006 between Flaga and RZB.
10.8	Term Loan Agreement, dated July 26, 2006, between Flaga, as Borrower, and RZB, as Lender.
10.9	Working Capital Facility Agreement, dated July 26, 2006, between Flaga, as Borrower, and RZB, as Lender.
10.10	Multi Currency Working Capital Facility Agreement, dated July 26, 2006, between ZLH, as Borrower, and RZB, as Lender.
31.1	Certification by the Chief Executive Officer relating to the Registrant’s Report on Form 10-Q for the quarter ended June 30, 2006, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by the Chief Financial Officer relating to the Registrant’s Report on Form 10-Q for the quarter ended June 30, 2006, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification by the Chief Executive Officer and the Chief Financial Officer relating to the Registrant’s Report on Form 10-Q for the quarter ended June 30, 2006, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

EX-10.1

Exhibit 10.1

Description of UGI Corporation Senior Executive Employee

Severance Pay Plan, Amended July 25, 2006

On July 25, 2006, the Board of Directors of UGI Corporation (the “Company”) approved an amendment to the UGI Corporation Senior Executive Employee Severance Pay Plan (as amended, the “UGI Severance Plan”). The amended UGI Severance Plan became effective July 25, 2006 and is applicable to the Company’s named executive officers employed by the Company.

The UGI Severance Plan assists certain senior level employees of the Company, including Lon R. Greenberg, Anthony J. Mendicino and John L. Walsh, in the event their employment is terminated without fault on their part. François Varagne is not entitled to severance benefits under the UGI Severance Plan. Specified benefits are payable to a senior executive covered by the UGI Severance Plan if the senior executive’s employment is involuntarily terminated for any reason other than for cause or as a result of the senior executive’s death or disability.

The UGI Severance Plan provides for cash payments equal to a participant’s compensation, as defined in the UGI Severance Plan, for 6 months (12 months in the case of Mr. Walsh and 18 months in the case of Mr. Greenberg). In addition, a participant receives the cash equivalent of his or her target bonus under the Company’s Annual Bonus Plan, pro-rated for the number of months served in the fiscal year. However, if the termination occurs in the last two months of the fiscal year, the Chief Executive Officer has the discretion to determine whether the participant will receive a pro-rated target bonus, or the actual annual bonus which would have been paid after the end of the fiscal year, assuming that the participant’s entire bonus was contingent on meeting the applicable financial performance goal. The UGI Severance Plan also provides for separation pay equal to one day’s pay per month of service, with a minimum payment equal to 3 months’ compensation and a maximum payment equal to 12 months’ compensation, in each case as defined in the UGI Severance Plan.

Certain employee benefits, including medical and dental benefits, are continued under the UGI Severance Plan for a period not to exceed 18 months (24 months in the case of Mr. Walsh and 30 months in the case of Mr. Greenberg). The UGI Severance Plan also provides for outplacement services for a period of 12 months following an executive’s termination of employment. Executives will be entitled to receive tax preparation services for their final year of employment under the UGI Severance Plan. The Company has the option to pay a participant the cash equivalent of those employee benefits. Provided that the participant is eligible to retire, all payments under the UGI Severance Plan can be reduced by an amount equal to the fair market value of certain equity-based awards, other than stock options, payable to the participant after the termination of employment.

In order to receive benefits under the UGI Severance Plan, a senior executive is required to execute a release which discharges the Company and its affiliates from liability for any claims the senior executive may have against any of them, other than claims for amounts or benefits due to the executive under any plan, program or contract provided by or entered into with the Company or its affiliates. The senior executive is also required to ratify post-employment activities agreements and to cooperate in attending to matters pending at the time of his or her termination of employment.

EX-10.2

Exhibit 10.2

Description of July 25, 2006 Amendment to the

UGI Corporation Supplemental Executive Retirement Plan

On July 25, 2006, the Board of Directors of UGI Corporation (the “Company”) approved an amendment to the UGI Corporation Supplemental Executive Retirement Plan (as amended, the “UGI SERP”). The amendment became effective July 25, 2006 and is applicable to the Company’s named executive officers, other than François Varagne, employed by the Company or certain subsidiaries or affiliates.

The UGI SERP provides supplemental retirement benefits to certain senior level employees of the Company, including Lon R. Greenberg, Anthony J. Mendicino and John L. Walsh, and certain employees of its subsidiaries and affiliates. Benefits payable under the UGI SERP shall be paid in the form of a lump sum payment upon a participant’s termination of employment with the Company and its subsidiaries and affiliates. Except in the case of a change in control, accrual of benefits under the UGI SERP shall immediately cease upon a participant’s retirement or termination of employment with the Company and its subsidiaries and affiliates.

EX-10.5

Exhibit 10.5

The taking of the original of this document or any certified copy thereof, including written confirmations or references thereto, into the Republic of Austria may cause Austrian stamp duty to be assessed by the Austrian tax authorities. Keep the original document, as well as all certified copies thereof, including written confirmations or references thereto, outside of the Republic of Austria.

GUARANTEE AGREEMENT

entered into by and between

UGI Corporation, 460 North Gulph Road, King of Prussia, PA 19406, USA, fax number 001-610-992-3258 (“UGI”), as guarantor

and

Raiffeisen Zentralbank Österreich Aktiengesellschaft, Am Stadtpark 9, 1030 Vienna, Austria, fax number +43-1-71707-1086 (“RZB”), as beneficiary.

WHEREAS:

(A) Zentraleuropa LPG Holding GmbH, an Austrian company registered under registered under FN 276576 f in the companies book (Firmenbuch) of the Landesgericht Korneuburg, with its seat at Leobendorf and its business address at Flaga Straße 1, 2100 Leobendorf (the “Borrower”) intends to extend to RZB a written offer (the “Offer”) to enter into a facility agreement in the amount of EURO 8,000,000 (the “Loan Agreement”) as attached to this Guarantee Agreement as Annex I.

(B) The Offer has not been extended, and the Loan Agreement has not been concluded to date.

(C) The Offer provides that UGI guarantees the payment of all amounts payable by the Borrower under or in connection with the Loan Agreement when due.

(D) UGI is willing to issue, and RZB is willing to accept such guarantee subject to the terms of this Guarantee Agreement.

NOW, THEREFORE, it is hereby agreed as follows:

1. UGI hereby confirms that it has taken notice of all terms of the Offer.

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2. UGI hereby irrevocably agrees that the Loan Agreement be entered into in accordance with the terms of the Offer.

3. As a guarantor according to Section 1357 of the Austrian Civil Code (“Bürge und Zahler” gemäß § 1357 ABGB), UGI hereby irrevocably guarantees in favor of RZB that the Borrower will duly fulfill all its present and future obligations under or in connection with the Loan Agreement (hereinafter collectively referred to as the “Secured Obligations”) including, without limitation, all obligations to repay principal, to pay interest and fees and, further, all payment obligations to RZB in the event that the Loan Agreement or any part thereof is or becomes invalid for any reason whatsoever. Whenever RZB does not receive full payment in respect of any of the Secured Obligations when due, UGI shall make such payment(s) under this Guarantee Agreement within 15 (fifteen) calendar days from receipt of a respective payment request by RZB. Such payment request shall be in writing and shall be delivered by registered mail, by express mail service or by personal delivery to the address of UGI (to the attention of the Corporate Secretary) given in this Guarantee Agreement or at such other address UGI may have notified to RZB in writing after the signing of this Guarantee Agreement. Each payment request sent by registered mail or by express mail service shall be deemed duly received by UGI on the fifth calendar day after the date of its dispatch by RZB, provided that RZB has, on the day of such dispatch, either dispatched by registered mail or by express mail service, or delivered by personal delivery, a copy of the same payment request to the process agent mentioned in Clause 13.

4. In addition, UGI hereby irrevocably covenants, undertakes and, further, guarantees in favor of RZB according to Section 880a second case of the Austrian Civil Code (“Erfolgsgarantie” gemäß § 880a zweiter Fall ABGB) that, from the signing of this Guarantee Agreement until the date on which the Loan Agreement will be terminated and RZB will have duly received payment in respect of all Secured Obligations:

(a) UGI is a corporation duly organized and validly existing under the laws of any State of the USA; and

(b) UGI has corporate power to enter into this Guarantee Agreement and to perform its obligations hereunder, and all necessary actions required to authorize its execution of this Guarantee Agreement and its performance of its obligations hereunder have been duly taken; and

(c) no government or other consents or exemptions are required to be obtained by UGI with respect to this Guarantee Agreement in order to give it validity, priority or make it enforceable or, if any such consents or exemptions are required to be obtained in order to give it validity, priority or make it enforceable, they have been or will be obtained in a timely manner, and such consents or exemptions are or will be in full force and effect, and all terms and conditions of any such consents or exemptions are and will be fully complied with in order to give it validity, priority or make it enforceable; and

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(d) in order to give it validity, priority or make it enforceable, (i) this Guarantee Agreement is not required to be registered by, or sent to, any court or other authority, and (ii) no registration dues, taxes or similar charges are required to be paid in relation to this Guarantee Agreement; and

(e) UGI’s obligations under this Guarantee Agreement are legal, valid and binding and enforceable in accordance with their terms, and such obligations will rank at least pari passu with all its other obligations, except obligations to creditors having preference as a matter of mandatory law; and

(f) UGI’s execution and delivery of this Guarantee Agreement and the exercise of its rights and performance of its obligations hereunder do not:

(i) conflict with any agreement or obligation to which UGI is a party or which is binding upon it or any of its assets; or

(ii) conflict with UGI’s constitutive documents and internal rules and regulations; or

(iii) conflict with any law, regulation, judicial order or the like;

to an extent or in a manner having a material adverse effect on UGI; and

(g) UGI is not in breach or in default under any agreement to which it is a party or which is binding on it (or any of its assets) to an extent or in a manner which might have a material adverse effect on it; and .

(h) to the best of UGI’s knowledge, all information supplied by UGI to RZB in connection with this Guarantee Agreement and the Loan Agreement is true, complete and accurate in all material respects; and

(i) UGI shall provide RZB with copies of its quarterly unaudited consolidated financial statements for each calendar quarter within forty-five (45) days after the end of the calendar quarter for which they have to be prepared, and with copies of its audited consolidated financial statements within ninety (90) days after the end of the financial period for which they have been or have to be prepared; and

(j) the Borrower is and will remain a company owned and controlled, either directly or indirectly, 50% by UGI Corporation, 460 North Gulph Road, King of Prussia, PA 19406, USA (“UGI Corporation”) and 50% by Progas-Lager- und Abfüllanlagengesellschaft m.b.H. Buschgrundstraße 6, D-45894 Gelsenkirchen, Germany; and

(k) the Borrower is not insolvent in terms of the Austrian Insolvency Codes (Ausgleichs-und Konkursordnung).

4. All payments made or to be made by UGI under this Guarantee Agreement shall be effected in the same currency, in which the respective Secured Obligations are denominated, by transfer to any account indicated in the respective payment request of RZB free from and clear

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of, and without any deduction for or on account of any present or future taxes, imposts, levies, duties, charges, fees, withholdings or other deductions of any kind or nature whatsoever. Should any payments by UGI under this Guarantee Agreement be subject to any deductions whatsoever, UGI shall pay additional amounts equal to all amounts deducted with the effect that RZB receives and retains all amounts it would have received and retained if no deductions were made.

5. If, as a result of a payment made by UGI under Clause 4, RZB will receive or be granted a credit against or remission for or deduction or relief from or in respect of any tax payable by it, which is both identifiable and quantifiable by RZB without requiring it to expend a material amount of time or incur a material cost in so identifying or quantifying (any of the foregoing, to the extent so identifiable and quantifiable, being referred to as a “Saving”), RZB shall, to the extent it can do so without prejudice to the retention of the relevant Saving and subject to UGI’s obligation to repay promptly on demand by RZB the amount to RZB if the relevant Saving is subsequently disallowed or cancelled, reimburse UGI promptly after receipt of such Saving by RZB with such amount.

6. Any costs and expenses, taxes and duties arising in connection with this Guarantee Agreement - including, without limitation, any duties under the Austrian Duties Act (öGebG) - shall in any event be borne and paid by UGI.

7. This Guarantee Agreement shall immediately enter into full force and effect. It shall expire when the Loan Agreement is terminated and all Secured Obligations are duly fulfilled.

8. UGI shall not acquire any rights or claims in connection with the Loan Agreement, nor shall UGI claim or accept payment or security in respect of its obligations arising from, or any payment(s) made under this Guarantee Agreement, until the Loan Agreement is terminated and RZB has duly received payment in respect of all Secured Obligations.

9. As regards the rights of RZB as set forth in clause 12.1 of the Loan Agreement (collectively the “Rights”), the following shall apply: RZB shall not exercise the Rights, provided that and as long as UGI duly complies with the provisions of this Guarantee Agreement. Under the terms of this Guarantee Agreement, UGI is deemed to duly comply with the provisions of this Guarantee Agreement, provided that UGI duly fulfills all present and future payment or other obligations under this Guarantee Agreement, and provided further that everything guaranteed by UGI pursuant to Clause 4 above is and remains true and correct.

10. Upon request of UGI, the parties hereto shall enter into negotiations for a reduction of the amounts secured under this Guarantee Agreement, subject to the amounts outstanding under the Loan Agreement, the overall credit standing of the Borrower and the equity ratio of the Borrower.

11. This Guarantee Agreement is governed by and construed in accordance with Austrian law.

12. Any disputes arising in connection with this Guarantee Agreement (hereinafter referred to as the “Disputes”) - including, without limitation, Disputes regarding the existence or validity of

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this Guarantee Agreement or any part hereof, and Disputes arising in the event that this Guarantee Agreement or any part hereof is or becomes inexistent or invalid – the following shall apply:

(a) All Disputes shall be finally settled under the Rules of Arbitration and Conciliation of the International Arbitral Centre of the Austrian Federal Economic Chamber (Vienna Rules) by one or more arbitrators appointed in accordance with such Rules. The arbitral proceeding shall take place, and the arbitral award shall be rendered in Vienna, Austria. The language of arbitration shall be English.

(b) Notwithstanding the provision in Clause 12(a), RZB shall have the exclusive right to instigate any legal proceedings regarding Disputes in the Commercial Court of Vienna, Austria (Handelsgericht Wien), or in any other court - in Austria, in the United States of America or in any third country - that has or may have or accepts jurisdiction (either by virtue of any law or legal regulation, or by virtue of any agreement, or on any other grounds).

(c) In any arbitral or court proceeding, the substantive law of Austria shall be applicable.

13. The Pledgor hereby appoints Wilhelm Schneider, a notary whose principal address is Alser Strasse 23/16, 1080 Vienna, Austria, and his associate Markus Benn Ibler, or such other person the Pledgor may notify to the Pledgee after the entry into this Guarantee Agreement, as its agent for service of process in Austria, and service upon the Pledgor shall be deemed completed upon service to such agent for service of process, whether or not forwarded to or received by the Pledgor.

Bratislava, July 26, 2006

UGI Corporation	Raiffeisen Zentralbank Österreich Aktiengesellschaft
Assistant Secretary	AVP                                         AVP

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Annex I

Multi Currency Facility Offer

6

Zentraleuropa LPG Holding GmbH

Flaga Straße 1

2100 Leobendorf

Austria

Raiffeisen Zentralbank Österreich

Aktiengesellschaft

Am Stadtpark 9

1030 Vienna

Austria Bratislava, 26 July 2006

Re: Multi Currency Facility Offer

Dear Sirs,

We, Zentraleuropa LPG Holding GmbH, an Austrian company registered under FN 276576 f in the companies book (Firmenbuch) of the Landesgericht Korneuburg with its seat at Leobendorf and its business address at Flaga Straße 1, 2100 Leobendorf, herewith offer Raiffeisen Zentralbank Österreich Aktiengesellschaft to enter with us into the following Multi Currency Facility agreement (for the sake of clarification it is hereby stated that up to now such Multi Currency Facility agreement has not been entered into in whatever form):

Quote

Facility Agreement

entered into by and between

Zentraleuropa LPG Holding GmbH, Flaga Straße 1, 2100 Leobendorf, Austria (attention: Managing Director (Josef F. Weinzierl); email: weinzierl@flaga.at) (the “Borrower”),

and

Loan Offer page 1

Raiffeisen Zentralbank Österreich Aktiengesellschaft, Am Stadtpark 9, 1030 Vienna, Austria (attention: Peter Straubinger; email: peter.straubinger@rzb.at) (the “Lender”).

1. FACILITY

1.1 Subject to the terms of this working capital facility agreement (the “Agreement”), the Lender makes available to the Borrower a revolving Multi Currency Facility (the “Facility”) in the aggregate maximum amount of EURO 8,000,000.00 (eight million), which amount may be, at the Borrower’s option, reduced to EURO 7,000,000 (seven million) upon five Business Days advanced written notice delivered by the Borrower to the Lender (the “Maximum Facility Amount”).

1.2 The Facility can be utilized in the form of fixed term advances as multi-currency credit facility in EURO (EUR), Polish Zloty (PLN), Czech Koruna (CZK), Slovak Koruna (SKK), Hungarian Forint (HUF) and Romanian Lei (RON) (each a “Permitted Currency”), provided that the aggregate amount outstanding shall never exceed the Maximum Facility Amount.

2. PURPOSE

2.1 The Borrower shall use all amounts borrowed under this Agreement for providing working capital to its subsidiaries.

2.2 Except for its undertakings in clause 4.2, the Lender is not bound to monitor or verify the application of any amount borrowed under this Agreement.

3. CONDITIONS OF UTILIZATION

3.1 The Borrower may not utilize the Facility unless the following conditions precedent have been fulfilled:

(i) This Agreement has been duly executed and come into full force and effect; and

(ii) the guarantee agreement referred to in clause 11.1(i) (the “Guarantee Agreement”) has been duly signed and come into full force and effect; and

(iii) the rights and interest of the Lender under the Guarantee Agreement (together with this Agreement the “Finance Documents”) have been created in a valid, binding and enforceable manner; and

Loan Offer page 2

(iv) the representations and warranties set forth in clause 9.1 are true and correct; and

(v) no event or circumstance as specified in clause 12.1 (a “Default”), which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an event of default as defined in clause 12.1 (an “Event of Default”), has occurred or threatens to occur; and

(vi) the Lender has received the documents and other evidence listed in schedule 1, and it has found such documents in form and substance acceptable and satisfactory to it.

4. UTILIZATION

4.1 The Borrower may utilize the Facility on a revolving basis by delivery to the Lender of a duly completed utilization request in the form of schedule 2 (a “Utilization Request”) to be received by the Lender no later than 11 a.m. (Vienna time) on the day falling three (3) Business Days (as defined below in this clause 4.1) before the proposed disbursement date, provided always that:

(i) the Utilization Request shall specify the requested Permitted Currency of the Advance; and

(ii) the number of Advances outstanding in a Permitted Currency does not exceed one; and

(iii) the amount of the requested Advance shall be at least EURO 100,000 or its equivalent in a Permitted Currency; and

(iv) the term of the requested Advance (the “Term”) shall be one (1), two (2) or six (6) months; and

(v) the terms of the requested Advance shall not extend beyond 364 days after the acceptance of this offer (the “Final Maturity Date”); and

(vi) the amount of the requested Advance, together with all amounts then outstanding shall not exceed the Maximum Facility Amount.

Each Utilization Request shall be irrevocable.

Under this Agreement, a Business Day means a day on which banks in Vienna, or (for the purpose of payments in currencies other than EUR) at the principal financial centre of the relevant currency, are open for the transaction of general business, or (for the purpose of payments in EUR) which is a TARGET Day. TARGET Day means a day on which TARGET is open for the settlement of

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payments in EUR (“TARGET” meaning Trans-European Automated Real-time Gross Settlement Express Transfer payment system).

4.2 Subject to the terms of this Agreement, the Lender shall disburse to the Borrower the amount of the requested Advance on the disbursement date as proposed by the Borrower in its Utilization Request by transfer to the following current accounts held by the Borrower with the Lender depending on the currency in which the Advance is utilized:

- EUR 1-04.065.108

- PLN 36-54.065.107

- SKK 38-54.065.107

- CZK 88-54.065.107

- RON 95-54.065.107

- HUF 98-54.065.107

5. REPAYMENT

5.1 The Borrower shall repay each Advance on the last day of its Term together with accrued interest. All amounts outstanding shall be repaid on the day falling 364 days after the acceptance of this offer.

5.2. The Borrower may at any time, if it gives the Lender not less than 5 Business Days prior notice, prepay the whole or any part of an Advance plus Break Costs. For the purpose of this Agreement “Break Costs” means the amount (if any) by which the interest which the Lender should have received for the period from the date of receipt of an Advance to the last day of the Term of the relevant Advance had the Advance received been paid on the last day of that Term exceeds the amount which the Lender would be able to obtain by placing an amount equal to that Advance received by it on deposit with a leading bank in the relevant interbank market for a period starting on the Business Day following receipt or recovery of the prepayment and ending on the last day of the current Term.

5.3. Subject to clause 4.1., the Borrower may re-borrow any amount re-paid or pre-paid under this Agreement.

6. INTEREST

6.1 The interest period for an Advance shall be the period from the date of its utilization until the last day of its Term or, as the case may be, the effective date of the prepayment of the entire amount of such Advance pursuant to clause 5.2.

6.2. The rate of interest on an Advance outstanding shall be the percentage rate per annum which is the aggregate of:

Loan Offer page 4

(i) The applicable Indicator (as defined in clause 6.3); and

(ii) a margin of 50.00 (fifty point zero) basis points; and

(iii) the applicable Mandatory Cost, if any, being the percentage rate per annum calculated by the Lender in accordance with schedule 2.

6.3 “Indicator” means

a) In case of an Advance in EURO the applicable EURIBOR:

(i) the rate per annum (rounded up to three decimal places) for deposits in EURO for a term comparable to the relevant interest period which appears on the Reuters page “EURIBOR 01” (or any successor to such page) published or reported by REUTERS or such other electronic information service as selected by the Lender; or

(ii) if no such rate is then available, the rate which is determined by the Lender to be the arithmetic mean (rounded up to three decimal places) of the rates per annum for such deposits in EURO offered by three major banks on the European interbank market selected by the Lender, at or about 11 a.m. (Vienna time) on the second TARGET Day before the commencement of the respective interest period.

b) in case of an Advance in Polish Zloty the applicable WIBOR:

(i) the rate per annum (rounded up to three decimal places) for deposits in Polish Zloty for a term comparable to the relevant interest period which appears on the Reuters Screen Page (or any successor to such page) published or reported by REUTERS or such other electronic information service as selected by the Lender; or

(ii) if no such rate is then available, the rate which is determined by the Lender to be the arithmetic mean (rounded up to three decimal places) of the rates per annum for such deposits in Polish Zloty offered by three major banks on the Warsaw interbank market selected by the Lender, at or about 11 a.m. (Warsaw time) on the second Business Day before the commencement of the respective interest period.

c) In case of an Advance made in Czech Koruna the applicable PRIBOR:

(i) the rate per annum (rounded up to three decimal places) for deposits in Czech Koruna for a term comparable to the relevant interest period which appears on the Reuters Screen PRBO Page (or any successor to such page) published or reported by REUTERS or such other electronic information service as selected by the Lender; or

Loan Offer page 5

(ii) if no such rate is then available, the rate which is determined by the Lender to be the arithmetic mean (rounded up to three decimal places) of the rates per annum for such deposits in Czech Koruna offered by three major banks on the Prague interbank market selected by the Lender, at or about 11 a.m. (Prague time) on the second Business Day before the commencement of the respective interest period.

d) In case of an Advance made in Slovak Koruna the applicable BRIBOR:

(i) the rate per annum (rounded up to three decimal places) for deposits in Slovak Koruna for a term comparable to the relevant interest period which appears on the Reuters Screen BRBO Page (or any successor to such page) published or reported by REUTERS or such other electronic information service as selected by the Lender; or

(ii) if no such rate is then available, the rate which is determined by the Lender to be the arithmetic mean (rounded up to three decimal places) of the rates per annum for such deposits in Slovak Koruna offered by three major banks on the Bratislava interbank market selected by the Lender, at or about 11 a.m. (Bratislava time) on the second Business Day before the commencement of the respective interest period.

e) In case of an Advance made in Hungarian Forint the applicable BUBOR:

(i) the rate per annum (rounded up to three decimal places) for deposits in Hungarian Forint for a term comparable to the relevant interest period which appears on the Reuters Screen BUBOR Page (or any successor to such page) published or reported by REUTERS or such other electronic information service as selected by the Lender; or ‘

(ii) if no such rate is then available, the rate which is determined by the Lender to be the arithmetic mean (rounded up to three decimal places) of the rates per annum for such deposits in Hungarian Forint offered by three major banks on the Budapest interbank market selected by the Lender, at or about 11 a.m. (Budapest time) on the second Business Day before the commencement of the respective interest period.

f) In case of an Advance made in Romanian Lei the applicable RONIBOR:

(i) the rate per annum (rounded up to three decimal places) for deposits in Romanian Lei for a term comparable to the relevant interest period which appears on the Reuters Screen ROBOR Page (or any successor to such page) published or reported by REUTERS or such other electronic information service as selected by the Lender; or

(ii) if no such rate is then available, the rate which is determined by the Lender to be the arithmetic mean (rounded up to three decimal places) of the rates per annum for such deposits in Romanian Lei offered by three

Loan Offer page 6

major banks on the Bucharest interbank market selected by the Lender, at or about 11 a.m. (Bucharest time) on the second Business Day before the commencement of the respective interest period.

6.4 Interests shall be calculated for each interest period of an Advance on the basis of actual number of days elapsed in a year of 360 days.

6.5 Interest for each Advance shall be paid by the Borrower to the Lender on the last day of its Term.

7. FEES, COSTS AND EXPENSES, INDEMNITIES

7.1 The Borrower shall pay the Lender a commitment fee of 12.50 (twelve point fifty) basis points per annum on the balance from time to time between the Maximum Facility Amount on the one hand and the aggregate amount of the Advances utilized hereunder on the other hand. The commitment fee shall be calculated for each calendar quarter on the basis of the actual number of days elapsed in a year of 360 days, and it shall be paid in arrears on the last day of the calendar quarter for which it is calculated.

7.2 The Borrower shall bear and pay all costs of the legal opinions mentioned in schedule 1. Furthermore, the Borrower shall bear, and if shall pay the Lender within seven (7) Business Days of demand by the Lender, all reasonable out of pocket costs and expenses of whatever nature incurred by the Lender, after the acceptance by the Lender of the present offer to enter into this Agreement, in connection with the implementation of this Agreement including, without limitation, costs and expenses arising in connection with the preservation, protection or enforcement of the Lender’s rights under this Agreement. Moreover, the Borrower shall bear, and it shall pay the Lender within seven (7) Business Days of demand by the Lender, any taxes or duties of whatever nature incurred by the Lender in connection with any of the Finance Documents including, without limitation, taxes or duties arising under the Austrian Duties Act (österreichisches Gebührengesetz).

7.3 The Borrower shall, within seven (7) days of demand by the Lender, reimburse the Lender for any incremental costs incurred by the Lender, after the acceptance by the Lender of the present offer to enter into this Agreement, in connection with the making or maintaining of, or the commitment to make, the Advance which result from the introduction of, or any change in, any applicable law or other legal regulation, or any change in the interpretation or application thereof by any governmental or regulatory authority charged with the administration thereof. The Borrower shall not be required to reimburse the Lender for increased costs attributable to any change in the rate of tax on the general income of Lender, or amounts the Lender has been compensated for pursuant to clause 8.2.

7.4 Notwithstanding, and without prejudice to, any other rights and claims of the Lender, the Borrower shall, within seven (7) Business Days of demand by the

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Lender, indemnify the Lender against any cost, loss or liability reasonably incurred by the Lender as a result of:

(i) the occurrence of any Event of Default; and/or

(ii) a failure by the Borrower to comply with any of its obligations under or in connection with this Agreement; and/or

(iii) funding, or making arrangements to fund, any Advance requested by the Borrower but not made by reason of the operation of any provisions of this Agreement (other than by reason of default or negligence by that Lender alone); and/or

(iv) the Advance (or part of the Advance) not being prepaid in accordance with a notice of Prepayment given by the Borrower.

8. PAYMENTS

8.1 All payments due from the Borrower under this Agreement shall be

(i) debited by the Lender with value of the relevant due date to the following current accounts, held by the Borrower with the Lender depending on the currency in which the payments are due:

- EUR       1-04.065.108

- PLN     36-54.065.107

- SKK     38-54.065.107

- CZK     88-54.065.107

- RON     95-54.065.107

- HUF     98-54.065.107

(ii) and, made by the Borrower no later than 11:00 a.m. (Vienna time) on the relevant due date by transfer to the same account.

Payment shall be made in the relevant Permitted Currency for value on the relevant due date, and it shall be made in full without any withholding or other deduction of any kind or nature (whether in respect of set-off, counterclaim, taxes, duties, charges or otherwise whatsoever).

8.2 If the Borrower is required by law or otherwise to make any withholding or other deduction whatsoever in respect of any amount due under this Agreement, and the Borrower makes such deduction, the Borrower shall increase the sum payable to the Lender in respect of which such deduction was made to the extent necessary to ensure that, after making such deduction, the Lender receives and retains (free from any liability in respect of any such deduction) a net sum equal to the sum which it would have received and so retained had no such deduction been made by the Borrower.

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8.3 If, as a result of a payment made by the Borrower under clause 8.2, the Lender has received or been granted a credit against or remission for or deduction or relief from or in respect of any tax payable by it, which is both identifiable and quantifiable by the Lender without requiring it to expend a material amount of time or incur a material cost in so identifying or quantifying (any of the foregoing, to the extent so identifiable and quantifiable, a “Saving”), the Lender shall, to the extent it can do so without prejudice to the retention of the relevant Saving and subject to the Borrower’s obligation to repay promptly on demand by the Lender the amount to the Lender if the relevant Saving is subsequently disallowed or cancelled, reimburse the Borrower promptly after receipt of such Saving by the Lender with such amount.

8.4 Any sum due to be paid under this Agreement on a day which is not a Business Day shall be paid on the last preceding Business Day.

8.5 If the Borrower fails to pay any amount payable by it under this Agreement on its due date, the Borrower shall pay default interest on such overdue amount from (and including) the due date up to (and including) the date of actual payment at a rate of three (3) per cent per annum. Default interest shall be paid in addition to interest payable under clause 6. Default interest shall be immediately payable by the Borrower on demand by the Lender. Default interest (if unpaid) arising on an overdue amount will be compounded with such overdue amount at the end of each interest period applicable to that overdue amount but will remain immediately due and payable. Default interest shall be calculated on the basis of the actual number of days elapsed in a year of 360 days.

9. REPRESENTATIONS AND WARRANTIES

9.1 The Borrower represents and warrants to the Lender that:

(i) The Borrower is a company duly established and validly existing under the laws of Austria having its corporate seat and head office in Austria;

(ii) The Borrower has the corporate power to own its assets and to carry on its business as if is being conducted;

(iii) the Borrower has the corporate power to enter into this Agreement and to perform its obligations hereunder, and all necessary action to authorize its entry into this Agreement and its performance hereof has been duly taken;

(iv) each of the Finance Documents is a legal, valid and binding agreement enforceable in accordance with its terms;

(v) the Borrower has taken no corporate action, and no other steps or legal proceedings have been started or, to the best of the Borrower’s knowledge, threatened against it, for its winding-up, dissolution, administration or re-organization or for the appointment of a receiver,

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administrator, administrative receiver, trustee or similar officer of it or of all or any material part of its assets or revenues;

(vi) no Default has occurred or will occur as a result of making an Advance, and the Borrower is not in breach or in default under any agreement or other instrument to which it is a party or which is binding on it (or any of its assets) to an extent or in a manner which would be reasonably likely to have a material adverse effect on it;

(vii) no litigation, arbitration or administrative proceeding of or before any court, arbitral body or agency has been started or, to the best of the Borrower’s knowledge, threatened against the Borrower which, if adversely determined, would be reasonably likely to have a material adverse effect on the Borrower;

(viii) to the best of the Borrower’s knowledge, all information supplied by the Borrower to the Lender in connection with this Agreement is true, complete and accurate in all material respects;

(ix) the Borrower’s entering into this Agreement and its exercise of its rights and performance of its obligations hereunder do not and will not conflict with any material agreement or material obligation to which the Borrower is a party or which is binding upon it or any of its assets, or conflict with its constitutive documents and internal rules and regulations;

(x) the Borrower is not and will not be insolvent in terms of the Austrian Insolvency Codes (Ausgleichs- und Konkursordnung);

(xi) the Borrower is and will remain a company owned and controlled, either directly or indirectly, 50% by UGI Corporation, 460 North Gulph Road, King of Prussia, PA 19406, USA (“UGI Corporation”) and 50% by Progas-Lager- und Abfüllanlagengesellschaft m.b.H. BuschgrundstraBe 6, D-45894 Gelsenkirchen, Germany; and

(xii) the payment obligations of the Borrower under this Agreement rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors.

9.2 The representations and warranties set out in clause 9.1 are deemed to be repeated by the Borrower (by reference to the facts and circumstances then existing) on each day from the entry into this Agreement to and including the day on which the Finance Documents are terminated and all rights and claims of the Lender under or in connection with the Finance Documents are duly fulfilled.

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10. COVENANTS AND UNDERTAKINGS

10.1 The Borrower covenants and undertakes, from the entry into this Agreement to and including the day on which the Finance Documents are terminated and all rights and claims of the Lender under or in connection with the Finance Documents are duly fulfilled, that:

(i) the Borrower shall provide to the Lender such information in relation to its business, operations and financial position as the Lender may reasonably require;

(ii) the Borrower shall provide, or cause UGI Corporation to provide, the Lender with copies of the audited consolidated financial statements of UGI Corporation within ninety (90) days after the end of the period for which they have been prepared, and copies of the unaudited quarterly consolidated financial statements of UGI Corporation within forty-five (45) days after the end of the period for which they have been prepared;

(iii) the Borrower shall notify the Lender of the occurrence of any Default and/or Event of Default;

(iv) the Borrower shall take out and maintain, or ensure that any of its affiliates takes out and maintains, insurance cover over the Borrower’s assets and other appropriate insurance cover including, but not limited to insurance cover for interruption of business and general liability, of a type and in an amount which is consistent with good business practice;

(v) the Borrower shall ensure that its obligations under this Agreement do and will always rank at least pari passu with its other secured and unsecured obligations, other than obligations to creditors having preference as a matter of mandatory law and other than obligations which already exist and have preference when this Agreement is concluded; as regards the latter obligations, the Borrower shall use reasonable best efforts to provide promptly that such obligations having a material adverse impact on its ability to comply with the terms of this Agreement will have no preference in respect of its obligations under this Agreement;

(vi) the Borrower shall not create or permit to exist any collateral or security interest in favor of one or more third parties on the whole or any part of its present or future property, assets or revenues, without the prior written consent of the Lender which shall not be unreasonably withheld. The provision in the first sentence of this clause 10.1(vi) shall not apply in respect of collateral or security interest created in the ordinary course of business, provided that such collateral or security interest has no material negative impact on the Borrower’s ability to perform under this Agreement;

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(vii) the Borrower shall not, without the prior written consent of the Lender which shall not be unreasonably withheld, either in a single transaction or in a series of transactions whether related or not and whether voluntarily or involuntarily, sell, transfer, lease or otherwise dispose of all or a substantial part of its property or assets. The provision in the first sentence of this clause 10.1(vii) shall not apply in respect of dispositions in the ordinary course of business, provided that such dispositions have no negative impact on the Borrower’s ability to perform under this Agreement; and

(viii) other than intercompany loans in favor of the Borrower’s subsidiaries the Borrower shall not make any loans or grant any credit or other financing of any kind to or for the benefit of any person or otherwise voluntarily assume any liability, whether actual or contingent, in respect of the obligations of any other person, except within the ordinary course of business, or with the prior written consent of the Lender not to be unreasonably withheld, provided always that such loans, credits, other financings or liabilities have no material negative impact on the Borrower’s ability to perform under this Agreement.

11. SECURITY

11.1 As security for all present and future rights and claims of the Lender under or in connection with this Agreement the following shall apply:

(i) Under a separate guarantee agreement in form and substance satisfactory to the Lender (the “Guarantee Agreement”), UGI Corporation issues a guarantee in favor of the Lender according to Section 1357 of the Austrian Civil Code (§ 1357 ABGB).

12. DEFAULT

12.1 In the event that:

(i) the Borrower defaults in the payment on the due date of any amount due and payable to the Lender under this Agreement and/or under any other present or future agreement for more than five days; or

(ii) the Borrower is in material breach of any of the terms and conditions of this Agreement and/or any other present or future agreement with the Lender (other than those referred to in clause 12.1(i)) and, in the case of a breach that is capable of remedy, such breach is not remedied within thirty days after the occurrence of such breach; or

(iii) any of the representations or warranties of the Borrower under this Agreement, or any of the opinions expressed in the legal opinion

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mentioned in schedule 1, proves to be or becomes incorrect, or any certificate, statement or notice issued to the Lender in connection with this Agreement proves to be or becomes incorrect in a material respect; or

(iv) a material adverse change in the economic situation of the Borrower occurs or threatens to occur; or

(v) any of the following Ratios (as defined in and calculated according to Schedule 4) is achieved:

(a) the Return on Assets is lower than 6,50% (six point five percent), or

(b) the Debt Amortization Period is equal to or longer than 6,75 (six point seventy five) years, or

(c) the Equity Ratio is lower than 15,00% (fifteen percent).

(each an Event of Default), the Lender shall at any time be entitled to terminate this Agreement (whereupon this Agreement shall be terminated with immediate effect), and/or to declare, in whole or in part, any amount(s) outstanding to it under or in connection with this Agreement due and payable (whereupon the respective amounts shall become due and payable with immediate effect).

12.2 If, as a result of any change in GAAP (as defined in the last paragraph of this clause 12.2) after the entry into this Agreement, any deterioration of any of the Ratios (as defined in Schedule 4) shall have occurred or in the opinion of UGI Corporation would be likely to occur, which change would not have occurred or would not have been likely to occur had no change in GAAP taken place:

(i) such a change in any of the Ratios shall not be considered to constitute an Event of Default or potential Event of Default, and

(ii) in the event of such a change in any of the Ratios, the Borrower shall provide the Lender with a detailed calculation based upon (a) GAAP prior to the change and (b) GAAP after the change, with a reasonable explanation for the differences, and

(iii) the parties to the Finance Documents shall negotiate in good faith an amendment to this Agreement which shall approximate to the extent possible the economic effect of the original Ratios taking into account such a change in GAAP.

If said parties do not agree on such amendment within sixty (60) days from the date on which the Borrower first notifies the Lender of such a change in GAAP, the Borrower shall have the option of (i) prepaying in full all amounts outstanding under the Overdraft Facility and all other amounts outstanding under or in connection with this Agreement, or (ii) for purposes of this Agreement, continuing to apply GAAP as in effect prior to such change in GAAP.

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“GAAP” means generally accepted accounting principles in the United States of America as in effect at the time of any particular computation or determination or as of the date of the relevant financial statements, as the case may be.

12.3 The Ordinary Income (as defined in Schedule 4) for any period shall be adjusted by the addition of the Ordinary Income of any acquisition made during that period as if such acquisition had occurred on the first day of the period. At the request of the Lender, the Borrower shall provide supporting documents reasonably satisfactory to the Lender relating to the Ordinary Income of the acquisition.

12.4 Should the Equity Ratio fall below 15.00% as a result of an acquisition financed with debt,

(i) the Borrower shall have sixty (60) days from the date of the acquisition to cure the cause (or have UGI Corporation cure the cause) of such a change, and

(ii) the Borrower shall immediately provide (or have UGI Corporation provide) reasonable evidence that a cure is possible within the 60 day period, and

(iii) within 30 days of completing an acquisition that would, in its opinion, cause such a change in the Equity Ratio, the Borrower shall provide (or have UGI Corporation provide) a reasonable explanation of the acquisition and a detailed calculation of the Equity Ratio as of the date of the acquisition, and,

(iv) upon curing the cause of such a change of the Equity Ratio, the Borrower shall provide (or have UGI Corporation provide) a reasonable explanation of the cure and a detailed calculation of the Equity Ratio that reflects the cure.

13. MISCELLANEOUS

13.1 If any of the provisions of this Agreement are or become invalid or unenforceable in any respect, the validity and enforceability of the remaining provisions shall not in any way be affected or impaired.

13.2 Any notice or communication under or in connection with this Agreement shall be in writing and shall be delivered by mail, fax, courier or email to the addresses given in this Agreement or at such other address as the recipient may have notified to the other party in writing.

13.3 The Borrower may not assign, pledge or dispose otherwise of any of its rights or claims under or in connection with this Agreement without the prior written consent of the Lender.

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13.4 The Lender may grant participations, and/or assign or transfer any or all of its rights or claims under or in connection with this Agreement to other financial institutions with the prior written consent of the Borrower only, which consent shall not be unreasonably withheld. Such consent, however, shall not be required for the granting of participations, nor for any assignment or transfer, to any members of the Raiffeisen Banking Group.

13.5 No failure by the Lender to exercise, nor any delay by the Lender in exercising, any right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise thereof or the exercise of any other right or remedy. The rights and remedies provided herein are cumulative and not exclusive of any rights or remedies provided by law.

13.6 The Borrower hereby irrevocably agrees to the electronic processing of all information and data concerning the Borrower and/or any of its affiliated companies which become known to the Lender in the course of the business relationship with the Borrower or any of its affiliated companies, and to the disclosure and forwarding of such information and data (except information and data regarding confidential know-how of the Borrower or any of its affiliates as well as confidential business or financial information explicitly identified by the Borrower in writing as being confidential as required by any law or legal regulation applicable to the Borrower or to any of its affiliates) within the internal organization of the Lender as well as to any domestic or foreign member companies of the Raiffeisen Banking Group and any (potential) parties of syndication or risk participation or security agreements. Prior to releasing any information or data to other parties (including companies of the Raiffeisen Banking Group) provided by the Borrower, the Lender shall enter into a written confidentiality agreement with the recipient of such information or data requiring it to maintain the confidentiality of the information or data, whereby such recipient shall be entitled to electronically process the information or data for internal use.

13.7 All present and future obligations under or in connection with this Agreement have to be fulfilled at the Lender’s premises at Am Stadtpark 9, 1030 Vienna.

13.8 In addition to the terms of this Agreement, the General Terms and Conditions (Version 2001) of the Lender shall apply subsidiarily.

13.9 This Agreement shall be governed by and construed in accordance with the Austrian law.

13.10  Any dispute, controversy or claim arising out of or in connection with this Agreement shall non exclusively be settled by the competent commercial court of Vienna.

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UNQUOTE

The present offer shall be irrevocably valid and binding until 30 September 2006. If you accept this offer, we shall pay you an up-front fee of EURO 100 flat. You can accept this offer by debiting our account no. 1-04.065.108 with such up-front fee. You are hereby irrevocably authorized to make such debit entry. Upon such debit entry only, the present offer shall be validly accepted irrespective of whether and when we will be informed of your acceptance.

Kind regards,

Zentraleuropa LPG Holding GmbH

Schedule 1	List of Condition Precedent Documents
Schedule 2	Form of Utilization Request
Schedule 3	Mandatory Cost Formulae
Schedule 4	Ratios; Manner of Calculation

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SCHEDULE 1

Condition Precedent Documents

1. A duly executed original of each Finance Document.

2. A copy of the constitutional documents of the Borrower and the Guarantor (individually also an “Obligor”).

3. An extract of the commercial (or equivalent) register of each Obligor.

4. A copy of a resolution of the directors, the board of directors or any other relevant board, body or person of each Obligor:

(i) approving the terms of, and the transactions contemplated by, the Finance Documents to which an Obligor is a party and resolving to execute the Finance Documents to which it is a party;

(ii) authorizing a specified person or persons to execute the Finance Documents to which it is a party on its behalf; and

(iii) authorizing a specified person or persons, on its behalf, to sign and/or dispatch all documents, notices and other communication (including, without limitation, any Utilization Request) to be signed and/or dispatched by it under or in connection with the Finance Documents to which it is a party.

5. A specimen of the signature of each person authorized by the resolution referred to in point 4 (iii) above.

6. A certificate provided by an authorized signatory of the relevant Obligor certifying that each copy document relating to it specified in this schedule 1 is true and correct, complete and in full force and effect as at a date no earlier than the entry into this Agreement.

7. A duly executed original of a letter from the process agent referred to in clause 13 of the Guarantee Agreement confirming that it has been appointed by the relevant Obligor and that it has accepted such appointment.

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8. A duly executed original of a legal opinion by Morgan Lewis & Bockius LLP, Philadelphia, USA, in respect of the Guarantee Agreement

9. Any other document or evidence the Lender may reasonably require.

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SCHEDULE 2

Form of Utilization Request

From: [Borrower]

To [Lender]

Date:

Ladies and Gentlemen,

1. We hereby request you to make the following transfer:

From our account No.: ¨

To our account No: ¨

Amount:

On (value date): ¨

Interest period: [1/2/6] months

2. We hereby confirm all conditions precedent in connection with such transfer are satisfied as of the date of this request.

3. This request is irrevocable.

Best regards

Zentraleuropa LPG Holding GmbH

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Schedule 3

Mandatory Cost Formulae

1. The Mandatory Cost is an addition to the interest rate to compensate the Lender for the cost of compliance with (a) the new requirements of any national bank (b) in either case, new requirements of any other authority which replaces all or any of its functions, (c) the new requirements of the European Central Bank (in this Clause 1, “new requirements” means requirements introduced and coming into force after the Date of this Agreement).

2. On the first day of each Interest Period (or as soon as possible thereafter) the Lender shall calculate, as a percentage rate, a rate (hereinafter referred to as the “Additional Cost Rate”) in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Lender as a weighted average of the Lender’s Additional Cost Rates and will be expressed as a percentage rate per annum.

3. The Additional Cost Rate for the Lender will be the percentage notified by the Lender as the cost of complying with the minimum reserve requirements of the Austrian National Bank and/or any other authorities referred to in Clause 1 above.

4. Any determination by the Lender pursuant to this schedule 3 in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to the Lender shall, in the absence of manifest error, be conclusive and binding on all parties to this Agreement.

5. The Lender may from time to time, after consultation with the Borrower, determine and notify to the Borrower any amendments which are required to be made to this schedule 3 in order to comply with any change in law, regulation or any requirements from time to time imposed by the Austrian National Bank and/or any other authorities referred to in Clause 1 above, and any such determination shall, in the absence of manifest error, be conclusive and binding on all parties to this Agreement.

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Schedule 4

Ratios; Manner of Calculation

I.) Ratios.

Certain financial ratios of UGI Corporation (on a consolidated basis) (individually a “Ratio” and collectively the “Ratios”) are defined as follows:

Equity Ratio as % of total assets means Total Equity divided by Average Adjusted Total Assets.

Return on Assets means Ordinary Income divided by Average Adjusted Total Assets.

Debt Amortization Period means Net Debt divided by EBTDA.

whereas the meaning of capitalized terms shall be as follows:

TOTAL EQUITY means Total Stockholders’ Equity according to quarterly/annual report plus Minority Interests.

AVERAGE ADJUSTED TOTAL ASSETS means the sum of Total Assets according to quarterly/annual report for each of the past four (4) financial quarters divided by four (4).

ORDINARY INCOME means operating income according to quarterly/annual reports.

EBTDA means Ordinary Income plus Depreciation and Amortization minus Interest Expense.

NET DEBT means Current Maturities of Long Term Debt plus Bank Loans plus Long Term Debt (altogether “INTEREST-BEARING LIABILITIES”) minus Cash and cash equivalents minus Short-term investments.

II.) Manner of Calculating Ratios:

The Ratios shall be calculated by the Lender in accordance with the terms set forth in this schedule 4 on the basis of the consolidated financial statements of UGI Corporation to be provided pursuant to clause 10.1 (ii), beginning with the consolidated quarterly financial statements of UGI Corporation for the first calendar quarter of 2006. UGI Corporation may, at its discretion, provide its calculation of such Ratios together with the submission of the financial statements that are required to be submitted pursuant to clause 10.1 (ii). For the sake of clarification, however, it is hereby stated that only the calculation by the Lender is relevant for the purpose of this Agreement.

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EX-10.6

Exhibit 10.6

The taking of the original of this document or any certified copy thereof, including written confirmations or references thereto, into the Republic of Austria may cause Austrian stamp duty to be assessed by the Austrian tax authorities. Keep the original document, as well as all certified copies thereof, including written confirmations or references thereto, outside of the Republic of Austria.

GUARANTEE AGREEMENT

entered into by and between

UGI Corporation, 460 North Gulph Road, King of Prussia, PA 19406, USA, fax number 001-610-992-3258 (“UGI”), as guarantor

and

Raiffeisen Zentralbank Österreich Aktiengesellschaft, Am Stadtpark 9, 1030 Vienna, Austria, fax number +43-1-71707-1086 (“RZB”), as beneficiary.

WHEREAS:

(A) Flaga GmbH, an Austrian company registered under FN 185471 b in the companies book (Firmenbuch) of the Landesgericht Korneuburg, with its seat at Leobendorf and its business address at Flaga Straße 1, 2100 Leobendorf (the “Borrower”) intends to extend to RZB a written offer (the “Offer”) to enter into a facility agreement in the amount of EURO 8,000,000 (the “Loan Agreement”) as attached to this Guarantee Agreement as Annex I.

(B) The Offer has not been extended, and the Loan Agreement has not been concluded to date.

(C) The Offer provides that UGI guarantees the payment of all amounts payable by the Borrower under or in connection with the Loan Agreement when due.

(D) UGI is willing to issue, and RZB is willing to accept such guarantee subject to the terms of this Guarantee Agreement.

NOW, THEREFORE, it is hereby agreed as follows:

1. UGI hereby confirms that it has taken notice of all terms of the Offer.

2. UGI hereby irrevocably agrees that the Loan Agreement be entered into in accordance with the terms of the Offer.

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3. As a guarantor according to Section 1357 of the Austrian Civil Code (“Bürge und Zahler” gemäß § 1357 ABGB), UGI hereby irrevocably guarantees in favor of RZB that the Borrower will duly fulfill all its present and future obligations under or in connection with the Loan Agreement (hereinafter collectively referred to as the “Secured Obligations”) including, without limitation, all obligations to repay principal, to pay interest and fees and, further, all payment obligations to RZB in the event that the Loan Agreement or any part thereof is or becomes invalid for any reason whatsoever. Whenever RZB does not receive full payment in respect of any of the Secured Obligations when due, UGI shall make such payment(s) under this Guarantee Agreement within 15 (fifteen) calendar days from receipt of a respective payment request by RZB. Such payment request shall be in writing and shall be delivered by registered mail, by express mail service or by personal delivery to the address of UGI (to the attention of the Corporate Secretary) given in this Guarantee Agreement or at such other address UGI may have notified to RZB in writing after the signing of this Guarantee Agreement. Each payment request sent by registered mail or by express mail service shall be deemed duly received by UGI on the fifth calendar day after the date of its dispatch by RZB, provided that RZB has, on the day of such dispatch, either dispatched by registered mail or by express mail service, or delivered by personal delivery, a copy of the same payment request to the process agent mentioned in Clause 13.

4. In addition, UGI hereby irrevocably covenants, undertakes and, further, guarantees in favor of RZB according to Section 880a second case of the Austrian Civil Code (“Erfolgsgarantie” gemäß § 880a zweiter Fall ABGB) that, from the signing of this Guarantee Agreement until the date on which the Loan Agreement will be terminated and RZB will have duly received payment in respect of all Secured Obligations:

(a) UGI is a corporation duly organized and validly existing under the laws of any State of the USA; and

(b) UGI has corporate power to enter into this Guarantee Agreement and to perform its obligations hereunder, and all necessary actions required to authorize its execution of this Guarantee Agreement and its performance of its obligations hereunder have been duly taken; and

(c) no government or other consents or exemptions are required to be obtained by UGI with respect to this Guarantee Agreement in order to give it validity, priority or make it enforceable or, if any such consents or exemptions are required to be obtained in order to give it validity, priority or make it enforceable, they have been or will be obtained in a timely manner, and such consents or exemptions are or will be in full force and effect, and all terms and conditions of any such consents or exemptions are and will be fully complied with in order to give it validity, priority or make it enforceable; and

(d) in order to give it validity, priority or make it enforceable, (i) this Guarantee Agreement is not required to be registered by, or sent to, any court or other authority,

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and (ii) no registration dues, taxes or similar charges are required to be paid in relation to this Guarantee Agreement; and

(e) UGI’s obligations under this Guarantee Agreement are legal, valid and binding and enforceable in accordance with their terms, and such obligations will rank at least pari passu with all its other obligations, except obligations to creditors having preference as a matter of mandatory law; and

(f) UGI’s execution and delivery of this Guarantee Agreement and the exercise of its rights and performance of its obligations hereunder do not:

(i) conflict with any agreement or obligation to which UGI is a party or which is binding upon it or any of its assets; or

(ii) conflict with UGI’s constitutive documents and internal rules and regulations; or

(iii) conflict with any law, regulation, judicial order or the like;

to an extent or in a manner having a material adverse effect on UGI; and

(g) UGI is not in breach or in default under any agreement to which it is a party or which is binding on it (or any of its assets) to an extent or in a manner which might have a material adverse effect on it; and

(h) to the best of UGI’s knowledge, all information supplied by UGI to RZB in connection with this Guarantee Agreement and the Loan Agreement is true, complete and accurate in all material respects; and

(i) UGI shall provide RZB with copies of its quarterly unaudited consolidated financial statements for each calendar quarter within forty-five (45) days after the end of the calendar quarter for which they have to be prepared, and with copies of its audited consolidated financial statements within ninety (90) days after the end of the financial period for which they have been or have to be prepared; and

(j) the Borrower is a company fully owned and controlled, either directly or indirectly, by UGI; and

(k) the Borrower is not insolvent in terms of the Austrian Insolvency Codes (Ausgleichs- und Konkursordnung).

4. All payments made or to be made by UGI under this Guarantee Agreement shall be effected in the same currency, in which the respective Secured Obligations are denominated, by transfer to any account indicated in the respective payment request of RZB free from and clear of, and without any deduction for or on account of any present or future taxes, imposts, levies, duties, charges, fees, withholdings or other deductions of any kind or nature whatsoever. Should any payments by UGI under this Guarantee Agreement be subject to any deductions whatsoever, UGI shall pay additional amounts equal to all amounts deducted with the effect

3

that RZB receives and retains all amounts it would have received and retained if no deductions were made.

5. If, as a result of a payment made by UGI under Clause 4, RZB will receive or be granted a credit against or remission for or deduction or relief from or in respect of any tax payable by it, which is both identifiable and quantifiable by RZB without requiring it to expend a material amount of time or incur a material cost in so identifying or quantifying (any of the foregoing, to the extent so identifiable and quantifiable, being referred to as a “Saving”), RZB shall, to the extent it can do so without prejudice to the retention of the relevant Saving and subject to UGl’s obligation to repay promptly on demand by RZB the amount to RZB if the relevant Saving is subsequently disallowed or cancelled, reimburse UGI promptly after receipt of such Saving by RZB with such amount.

6. Any costs and expenses, taxes and duties arising in connection with this Guarantee Agreement - including, without limitation, any duties under the Austrian Duties Act (öGebG) - shall in any event be borne and paid by UGI.

7. This Guarantee Agreement shall immediately enter into full force and effect. It shall expire when the Loan Agreement is terminated and all Secured Obligations are duly fulfilled.

8. UGI shall not acquire any rights or claims in connection with the Loan Agreement, nor shall UGI claim or accept payment or security in respect of its obligations arising from, or any payment(s) made under this Guarantee Agreement, until the Loan Agreement is terminated and RZB has duly received payment in respect of all Secured Obligations.

9. As regards the rights of RZB as set forth in clause 12.1 of the Loan Agreement (collectively the “Rights”), the following shall apply: RZB shall not exercise the Rights, provided that and as long as UGI duly complies with the provisions of this Guarantee Agreement. Under the terms of this Guarantee Agreement, UGI is deemed to duly comply with the provisions of this Guarantee Agreement, provided that UGI duly fulfills all present and future payment or other obligations under this Guarantee Agreement, and provided further that everything guaranteed by UGI pursuant to Clause 4 above is and remains true and correct.

10. Upon request of UGI, the parties hereto shall enter into negotiations for a reduction of the amounts secured under this Guarantee Agreement, subject to the amounts outstanding under the Loan Agreement, the overall credit standing of the Borrower and the equity ratio of the Borrower.

11. This Guarantee Agreement is governed by and construed in accordance with Austrian law.

4

12. Any disputes arising in connection with this Guarantee Agreement (hereinafter referred to as the “Disputes”) – including, without limitation, Disputes regarding the existence or validity of this Guarantee Agreement or any part hereof, and Disputes arising in the event that this Guarantee Agreement or any part hereof is or becomes inexistent or invalid – the following shall apply:

(a) All Disputes shall be finally settled under the Rules of Arbitration and Conciliation of the International Arbitral Centre of the Austrian Federal Economic Chamber (Vienna Rules) by one or more arbitrators appointed in accordance with such Rules. The arbitral proceeding shall take place, and the arbitral award shall be rendered in Vienna, Austria. The language of arbitration shall be English.

(b) Notwithstanding the provision in Clause 12(a), RZB shall have the exclusive right to instigate any legal proceedings regarding Disputes in the Commercial Court of Vienna, Austria (Handelsgericht Wien), or in any other court - in Austria, in the United States of America or in any third country - that has or may have or accepts jurisdiction (either by virtue of any law or legal regulation, or by virtue of any agreement, or on any other grounds).

(c) In any arbitral or court proceeding, the substantive law of Austria shall be applicable.

13. The Pledgor hereby appoints Wilhelm Schneider, a notary whose principal address is Alser Strasse 23/16, 1080 Vienna, Austria, and his associate Markus Benn Ibler, or such other person the Pledgor may notify to the Pledgee after the entry into this Guarantee Agreement, as its agent for service of process in Austria, and service upon the Pledgor shall be deemed completed upon service to such agent for service of process, whether or not forwarded to or received by the Pledgor.

Bratislava, July 26, 2006

UGI Corporation	Raiffeisen Zentralbank Österreich Aktiengesellschaft
Assistant Secretary	AVP                                    AVP

5

Annex I

Working Capital Facility Offer

6

Flaga GmbH

Flaga Straße 1

2100 Leobendorf

Austria

Raiffeisen Zentralbank Österreich
Aktiengesellschaft
Am Stadtpark 9
1030 Vienna
Austria	Bratislava, 26 July 2006

Re: Working Capital Facility Offer

Dear Sirs,

We, Flaga GmbH, an Austrian company registered under FN 185471 b in the companies book (Firmenbuch) of the Landesgericht Korneuburg, with its seat at Leobendorf and its business address at Flaga Straße 1, 2100 Leobendorf, herewith offer Raiffeisen Zentralbank Österreich Aktiengesellschaft to enter with us into the following facility agreement (for the sake of clarification it is hereby stated that up to now such loan agreement has not been entered into in whatever form):

Quote

Facility Agreement

entered into by and between

Flaga GmbH, Flaga Straße 1, 2100 Leobendorf, Austria (attention: Managing Director (Josef F. Weinzierl); email: weinzierl@flaga.at) (the “Borrower”),

and

Raiffeisen Zentralbank Österreich Aktiengesellschaft, Am Stadtpark 9, 1030 Vienna, Austria (attention: Peter Straubinger; email: peter.straubinger@rzb.at) (the “Lender”).

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1. FACILITY

1.1 Subject to the terms of this working capital facility agreement (the “Agreement”), the Lender makes available to the Borrower a revolving working capital facility (the “Facility”) in the aggregate maximum amount of EURO 8,000,000.00 (eight million) (the “Maximum Facility Amount”).

1.2 The Facility can be utilized as:

(i) overdraft facility (the “Overdraft Facility”) in EURO available on the account no. 1-00.640.763 held by the Borrower with the Lender (the “Overdraft Account”); and/or

(ii) guarantee facility (the “Guarantee Facility”) for the issuance of payment or performance guarantees in EURO or foreign currency by the Lender upon the request and for the account of the Borrower;

provided that the aggregate amount outstanding under the Overdraft Facility and the Guarantee Facility shall never exceed the Maximum Facility Amount.

2. PURPOSE

2.1 The Borrower shall use all amounts borrowed under this Agreement for its general financing requirements and those of its subsidiary, Progas Austria.

2.2 Except for its undertakings in clauses 4.2, 4.4 and 8.1(i), the Lender is not bound to monitor or verify the application of any amount borrowed under this Agreement.

3. CONDITIONS OF UTILIZATION

3.1 The Borrower may not utilize the Facility unless the following conditions precedent have been fulfilled:

(i) This Agreement has been duly executed and come into full force and effect; and

(ii) the guarantee agreement referred to in clause 11.1(i) (the “Guarantee Agreement”) has been duly signed and come into full force and effect; and

(iii) the rights and interest of the Lender under the Guarantee Agreement (together with this Agreement the “Finance Documents”) have been created in a valid, binding and enforceable manner; and

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(iv) the representations and warranties set forth in clause 9.1 are true and correct; and

(v) no event or circumstance as specified in clause 12.1 (a “Default”), which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an event of default as defined in clause 12.1 (an “Event of Default”), has occurred or threatens to occur; and

(vi) the Lender has received the documents and other evidence listed in schedule 1, and it has found such documents in form and substance acceptable and satisfactory to it.

4. UTILIZATION

Overdraft Facility

4.1 The Borrower may utilize the Overdraft Facility in EURO by giving the Lender payment orders or debit instructions in respect of the Overdraft Account, provided always that the amount of the respective payment order or debit instruction, together with all amounts then outstanding under the Overdraft Facility and the Guarantee Facility, shall not exceed the Maximum Facility Amount. Each payment order and debit instruction shall be irrevocable.

4.2 Subject to the terms of this Agreement, the Lender shall comply with the payment orders and debit instructions referred to in clause 4.1 and debit the Overdraft Account accordingly.

Guarantee Facility

4.3 The Borrower may utilize the Guarantee Facility by giving the Lender instructions to issue payment or performance guarantees (each a “Guarantee”), provided always that:

(i) each instruction shall (a) specify the beneficiary, the amount, the date of issue and the date of expiry of the requested Guarantee, and (b) have the wording of the requested Guarantee attached to it; and

(ii) the term of the requested Guarantee is not more than 24 months from issuing of the Guarantee; and

(iii) the wording of the requested Guarantee is acceptable to the Lender in form and substance; and

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(iv) the amount of the requested Guarantee, together with all amounts then outstanding under the Overdraft Facility and the Guarantee Facility, shall not exceed the Maximum Facility Amount.

Each instruction to issue a Guarantee shall be irrevocable.

4.4. Subject to the terms of this Agreement, the Lender shall issue the requested Guarantees.

4.5. Should Guarantees issued by the Lender according to this Agreement under the Guarantee Facility be drawn for there exists no foreign currency account of the Borrower with the Lender, the Lender shall inform the Borrower and shall debit the amounts drawn to the current Overdraft Account unless the Borrower provides the amounts in the relevant foreign currency within 2 Business Days. The Lender will convert amounts paid under a Guarantee into the currency on the basis of the daily exchange rate as of the date of the instruction to issue the Guarantee. Insofar as there is no cover for these amounts in the Overdraft Account, the Borrower shall immediately pay these amounts to the Lender for credit and deposit in the Overdraft Account.

5. REPAYMENT

5.1 Overdraft Facility

The Borrower shall repay all amounts outstanding under the Overdraft Facility at the latest 364 days after the acceptance of this offer (the “Final Maturity Date”).

5.2 Guarantee Facility

In case a payment demand is made by the beneficiary under a Guarantee, the Lender will send a notice to the Borrower informing the Borrower of such payment demand, and specifying (a) the amount to be reimbursed by the Borrower, (b) the date on which such reimbursement is to be made, and (c) the account to which the reimbursement amount is to be transferred. The Borrower shall make each reimbursement in accordance with the respective notice of the Lender.

5.3. From the date a payment demand is made by a beneficiary under a Guarantee until the date the Lender has been fully reimbursed by the Borrower in accordance with clause 5.2 the Lender shall not be obliged to issue any further Guarantee.

5.4. The Borrower shall pay the Lender all amounts outstanding under the Guarantee Facility at the latest on the day falling 364 days after the acceptance of this offer (the “Expiry Date”).

5.5. In case that a Guarantee issued extends beyond the Expiry Date for whatever reason (e.g. an extend or pay request is made by the beneficiary), the Borrower shall either provide the Lender with a cash deposit in an amount equal to the aggregate commitment of Lender under that Guarantee then outstanding as

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security for all reimbursement claims of the Lender against the Borrower that may arise in connection with these Guarantees or return the Guarantee together with a waiver by the beneficiary of all rights under the Guarantee.

6. INTEREST

Overdraft Facility

6.1 The rate of interest on the amounts outstanding under the Overdraft Facility shall be the percentage rate per annum which is the aggregate of:

(i) The applicable EONIA (as defined in clause 6.2); and

(ii) a margin of 50.00 (fifty point zero) basis points; and

(iii) the applicable Mandatory Cost, if any, being the percentage rate per annum calculated by the Lender in accordance with schedule 3.

6.2 “EONIA” (EURO OVERNIGHT INDEX AVERAGE) means

(i) the rate for overnight deposits in EURO calculated by the European Central Bank and appearing on the Reuters EONIA page (or the relevant page of the Telerate or Bloomberg system, or any successor to any of the aforementioned pages) at about 7 p.m. Central European time, or

(ii) if no such page is then available, the rate being the arithmetic mean (rounded up to three decimal places) of rates quoted to the Lender by three reference banks taking part in the daily EURIBOR-fixing procedure (to be selected by the Lender at its sole discretion) for EURO overnight moneys, or

(iii) if no such quotes are then available, the rate equal to the actual costs of funding incurred by the Lender.

EONIA will be determined by the Lender on a daily basis.

6.3 Interest under the Overdraft Facility shall be calculated for the amount outstanding from time to time on the Overdraft Account on the basis of the actual number of days elapsed in a year of 360 days. Such calculation shall be made by the Lender on a daily basis.

6.4 Interest on the amounts outstanding under Overdraft Facility shall be paid by the Borrower to the Lender on the last Business Day of each quarter of a calendar year.

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7. FEES, COSTS AND EXPENSES, INDEMNITIES

7.1 The Borrower shall pay the Lender a commitment fee of 12.50 (twelve point fifty) basis points per annum on the balance from time to time between the Maximum Facility Amount on the one hand and the aggregate outstanding amounts under the Overdraft Facility plus the aggregate amounts of all issued Guarantees under the Guarantee Facility, on the other hand. The commitment fee shall be calculated for each calendar quarter on the basis of the actual number of days elapsed in a year of 360 days, and it shall be paid in arrears on the last Business Day of the calendar quarter for which it is calculated.

7.2 For each Guarantee issued under the Guarantee Facility, the Borrower shall pay the Lender:

(i) on the relevant issuance date an issuance fee in the amount of EURO 53.00; and

(ii) a guarantee fee of 25.00 (twenty-five point zero) basis points per annum on the maximum Guarantee amount. The guarantee fee shall be calculated during the validity of the Guarantee, and it shall be payable in respect of a certain Guarantee for each calendar quarter in advance on the relevant issuance date and, thereafter, on the last Business Day before the calendar quarter for which it is payable.

7.3 The Borrower shall bear and pay all costs of the legal opinions mentioned in schedule 1. Furthermore, the Borrower shall bear, and it shall pay the Lender within seven (7) Business Days of demand by the Lender, all reasonable out of pocket costs and expenses of whatever nature incurred by the Lender, after the acceptance by the Lender of the present offer to enter into this Agreement, in connection with the implementation of this Agreement including, without limitation, costs and expenses arising in connection with the preservation, protection or enforcement of the Lender’s rights under this Agreement. Moreover, the Borrower shall bear, and it shall pay the Lender within seven (7) Business Days of demand by the Lender, any taxes or duties of whatever nature incurred by the Lender in connection with any of the Finance Documents including, without limitation, taxes or duties arising under the Austrian Duties Act (österreichisches Gebührengesetz).

7.4 The Borrower shall, within seven (7) days of demand by the Lender, reimburse the Lender for any incremental costs incurred by the Lender, after the acceptance by the Lender of the present offer to enter into this Agreement, in connection with the funding or maintaining of, or the commitment to fund, the Overdraft Facility which result from the introduction of, or any change in, any applicable law or other legal regulation, or any change in the interpretation or application thereof by any governmental or regulatory authority charged with the administration thereof. The Borrower shall not be required to reimburse the Lender for increased costs attributable to any change in the rate of tax on the general income of Lender, or amounts the Lender has been compensated for pursuant to clause 8.2.

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7.5 Notwithstanding, and without prejudice to, any other rights and claims of the Lender, the Borrower shall, within seven (7) Business Days of demand by the Lender, indemnify the Lender against any cost, loss or liability reasonably incurred by the Lender as a result of:

(i) the occurrence of any Event of Default; and/or

(ii) a failure by the Borrower to comply with any of its obligations under or in connection with this Agreement; and/or

(iii) funding, or making arrangements to fund, any payment orders or debit requests requested by the Borrower but not made by reason of the operation of any provisions of this Agreement (other than by reason of default or negligence by that Lender alone).

8. PAYMENTS

8.1 All payments due from the Borrower under this Agreement shall be

(i) debited by the Lender with value of the relevant due date to the account no. 1-00.640.763 held by the Borrower with the Lender, and

(ii) made by the Borrower no later than 11:00 a.m. (Vienna time) on the relevant due date by transfer to the same account.

Payment shall be made in EURO (except as may be required by clause 4.5) for value on the due date, and it shall be made in full without any withholding or other deduction of any kind or nature (whether in respect of set-off, counterclaim, taxes, duties, charges or otherwise whatsoever).

8.2 if the Borrower is required by law or otherwise to make any withholding or other deduction whatsoever in respect of any amount due under this Agreement, and the Borrower makes such deduction, the Borrower shall increase the sum payable to the Lender in respect of which such deduction was made to the extent necessary to ensure that, after making such deduction, the Lender receives and retains (free from any liability in respect of any such deduction) a net sum equal to the sum which it would have received and so retained had no such deduction been made by the Borrower.

8.3 If, as a result of a payment made by the Borrower under clause 8.2, the Lender has received or been granted a credit against or remission for or deduction or relief from or in respect of any tax payable by it, which is both identifiable and quantifiable by the Lender without requiring it to expend a material amount of time or incur a material cost in so identifying or quantifying (any of the foregoing, to the extent so identifiable and quantifiable, a “Saving”), the Lender shall, to the extent it can do so without prejudice to the retention of the relevant Saving and subject to the Borrower’s obligation to repay promptly on demand by the Lender

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the amount to the Lender if the relevant Saving is subsequently disallowed or cancelled, reimburse the Borrower promptly after receipt of such Saving by the Lender with such amount.

8.4 Any sum due to be paid under this Agreement on a day which is not a Business Day shall be paid on the last preceding Business Day.

8.5 If the Borrower fails to pay any amount payable by it under this Agreement on its due date, the Borrower shall pay default interest on such overdue amount from (and including) the due date up to (and including) the date of actual payment at a rate of three (3) per cent per annum. Default interest shall be paid in addition to interest payable under clause 6. Default interest shall be immediately payable by the Borrower on demand by the Lender. Default interest (if unpaid) arising on an overdue amount will be compounded with such overdue amount at the end of each interest period applicable to that overdue amount but will remain immediately due and payable. Default interest shall be calculated on the basis of the actual number of days elapsed in a year of 360 days.

9. REPRESENTATIONS AND WARRANTIES

9.1 The Borrower represents and warrants to the Lender that:

(i) The Borrower is a company duly established and validly existing under the laws of Austria having its corporate seat and head office in Austria;

(ii) The Borrower has the corporate power to own its assets and to carry on its business as it is being conducted;

(iii) the Borrower has the corporate power to enter into this Agreement and to perform its obligations hereunder, and all necessary action to authorize its entry into this Agreement and its performance hereof has been duly taken;

(iv) each of the Finance Documents is a legal, valid and binding agreement enforceable in accordance with its terms;

(v) the Borrower has taken no corporate action, and no other steps or legal proceedings have been started or, to the best of the Borrower’s knowledge, threatened against it, for its winding-up, dissolution, administration or re-organization or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of it or of all or any material part of its assets or revenues;

(vi) no Default has occurred or will occur as a result of drawing on the Overdraft Facility, and the Borrower is not in breach or in default under any agreement or other instrument to which it is a party or which is binding on it (or any of its assets) to an extent or in a manner which would be reasonably likely to have a material adverse effect on it;

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(vii) no litigation, arbitration or administrative proceeding of or before any court, arbitral body or agency has been started or, to the best of the Borrower’s knowledge, threatened against the Borrower which, if adversely determined, would be reasonably likely to have a material adverse effect on the Borrower;

(viii) to the best of the Borrower’s knowledge, all information supplied by the Borrower or any of its direct or indirect shareholders to the Lender in connection with this Agreement is true, complete and accurate in all material respects;

(ix) the Borrower’s entering into this Agreement and its exercise of its rights and performance of its obligations hereunder do not and will not conflict with any material agreement or material obligation to which the Borrower is a party or which is binding upon it or any of its assets, or conflict with its constitutive documents and internal rules and regulations;

(x) the Borrower is not and will not be insolvent in terms of the Austrian Insolvency Codes (Ausgleichs- und Konkursordnung);

(xi) the Borrower is and will remain a company fully owned and controlled, either directly or indirectly, by UGI Corporation, 460 North Gulph Road, King of Prussia, PA 19406, USA (“UGI Corporation”); and

(xii) the payment obligations of the Borrower under this Agreement rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors.

9.2 The representations and warranties set out in clause 9.1 are deemed to be repeated by the Borrower (by reference to the facts and circumstances then existing) on each day from the entry into this Agreement to and including the day on which the Finance Documents are terminated and all rights and claims of the Lender under or in connection with the Finance Documents are duly fulfilled.

10. COVENANTS AND UNDERTAKINGS

10.1 The Borrower covenants and undertakes, from the entry into this Agreement to and including the day on which the Finance Documents are terminated and all rights and claims of the Lender under or in connection with the Finance Documents are duly fulfilled; that:

(i) the Borrower shall provide to the Lender such information in relation to its business, operations and financial position as the Lender may reasonably require;

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(ii) the Borrower shall provide, or cause UGI Corporation to provide, the Lender with copies of the audited consolidated financial statements of UGI Corporation within ninety (90) days after the end of the period for which they have been prepared, and copies of the unaudited quarterly consolidated financial statements of UGI Corporation within forty-five (45) days after the end of the period for which they have been prepared;

(iii) the Borrower shall notify the Lender of the occurrence of any Default and/or Event of Default;

(iv) the Borrower shall take out and maintain, or ensure that any of its affiliates takes out and maintains, insurance cover over the Borrower’s assets and other appropriate insurance cover including, but not limited to insurance cover for interruption of business and general liability, of a type and in an amount which is consistent with good business practice;

(v) the Borrower shall ensure that its obligations under this Agreement do and will always rank at least pari passu with its other secured and unsecured obligations, other than obligations to creditors having preference as a matter of mandatory law and other than obligations which already exist and have preference when this Agreement is concluded; as regards the latter obligations, the Borrower shall use reasonable best efforts to provide promptly that such obligations having a material adverse impact on its ability to comply with the terms of this Agreement will have no preference in respect of its obligations under this Agreement;

(vi) the Borrower shall not create or permit to exist any collateral or security interest in favor of one or more third parties on the whole or any part of its present or future property, assets or revenues, without the prior written consent of the Lender which shall not be unreasonably withheld. The provision in the first sentence of this clause 10.1(vi) shall not apply in respect of collateral or security interest created in the ordinary course of business, provided that such collateral or security interest has no material negative impact on the Borrower’s ability to perform under this Agreement;

(vii) the Borrower shall not, without the prior written consent of the Lender which shall not be unreasonably withheld, either in a single transaction or in a series of transactions whether related or not and whether voluntarily or involuntarily, sell, transfer, lease or otherwise dispose of all or a substantial part of its property or assets. The provision in the first sentence of this clause 10.1(vii) shall not apply in respect of dispositions in the ordinary course of business, provided that such dispositions have no negative impact on the Borrower’s ability to perform under this Agreement;

(viii) other than

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(a) intercompany loans in favor of the Borrower’s subsidiaries (including, without limitation, Progas Austria) and the existing loan in the amount of EUR 11,407,482 granted by the Borrower to UGI France, Inc. (now known as UGI Europe, Inc.), and

(b) the Borrower’s undertakings set forth in that certain shareholders’ agreement regarding Zentraleuropa LPG Holding GmbH (as presented by the Borrower to the Lender prior to the entry into this Agreement) so long as the Borrower holds and controls a share of at least 50% in Zentraleuropa LPG Holding GmbH,

the Borrower shall not make any loans or grant any credit or other financing of any kind to or for the benefit of any person or otherwise voluntarily assume any liability, whether actual or contingent, in respect of the obligations of any other person, except within the ordinary course of business, or with the prior written consent of the Lender not to be unreasonably withheld, provided always that such loans, credits, other financings or liabilities have no material negative impact on the Borrower’s ability to perform under this Agreement; and

(ix) the Borrower hereby irrevocably grants a right of first refusal for any and all of its present and future lending transactions in favor of the Lender. It is understood that the Borrower shall have the right to solicit offers from other banks in respect of such transactions. However, the Lender shall have the right to enter into any or all of such transactions, and to provide all related services, at competitive market conditions, if among the banks making offers, the Lender’s offer is at least as competitive as the best offer made among the other banks. It is understood that the Borrower shall not accept a Lender’s offer not made at competitive market conditions.

11. SECURITY

11.1 As security for all present and future rights and claims of the Lender under or in connection with this Agreement the following shall apply:

(i) Under a separate guarantee agreement in form and substance satisfactory to the Lender (the “Guarantee Agreement”), UGI Corporation issues a guarantee in favor of the Lender according to Section 1357 of the Austrian Civil Code (§ 1357 ABGB).

12. DEFAULT

12.1 In the event that:

(i) the Borrower defaults in the payment on the due date of any amount due and payable to the Lender under this Agreement and/or under any other present or future agreement for more than five days; or

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(ii) the Borrower is in material breach of any of the terms and conditions of this Agreement and/or any other present or future agreement with the Lender (other than those referred to in clause 12.1(i)) and, in the case of a breach that is capable of remedy, such breach is not remedied within thirty days after the occurrence of such breach; or

(iii) any of the representations or warranties of the Borrower under this Agreement, or any of the opinions expressed in the legal opinion mentioned in schedule 1, proves to be or becomes incorrect, or any certificate, statement or notice issued to the Lender in connection with this Agreement proves to be or becomes incorrect in a material respect; or

(iv) a material adverse change in the economic situation of the Borrower occurs or threatens to occur; or

(v) any of the following Ratios (as defined in and calculated according to Schedule 3) is achieved:

(a) the Return on Assets is lower than 6.50% (six point five percent), or

(b) the Debt Amortization Period is equal to or longer than 6.75 (six point seventy five) years, or

(c) the Equity Ratio is lower than 15.00% (fifteen percent).

(each an Event of Default), the Lender shall at any time be entitled to terminate this Agreement (whereupon this Agreement shall be terminated with immediate effect), and/or to declare, in whole or in part, any amount(s) outstanding to it under or in connection with this Agreement due and payable (whereupon the respective amounts shall become due and payable with immediate effect), and/or to request that the Borrower provides the Lender with, and grants the Lender a first priority pledge over, a cash deposit in an amount equal to the aggregate commitment of Lender under all Guarantees then outstanding as security for all reimbursement claims of the Lender against the Borrower that may arise in connection with these Guarantees (whereupon the Borrower shall promptly provide such cash deposit and grant such pledge).

12.2 If, as a result of any change in GAAP (as defined in the last paragraph of this clause 12.2) after the entry into this Agreement, any deterioration of any of the Ratios (as defined in Schedule 3) shall have occurred or in the opinion of UGI Corporation would be likely to occur, which change would not have occurred or would not have been likely to occur had no change in GAAP taken place:

(i) such a change in any of the Ratios shall not be considered to constitute an Event of Default or potential Event of Default, and

(ii) in the event of such a change in any of the Ratios, the Borrower shall provide the Lender with a detailed calculation based upon (a) GAAP prior to the change and (b) GAAP after the change, with a reasonable explanation for the differences, and

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(iii) the parties to the Finance Documents shall negotiate in good faith an amendment to this Agreement which shall approximate to the extent possible the economic effect of the original Ratios taking into account such a change in GAAP.

If said parties do not agree on such amendment within sixty (60) days from the date on which the Borrower first notifies the Lender of such a change in GAAP, the Borrower shall have the option of (i) prepaying in full all amounts outstanding under the Overdraft Facility and all other amounts outstanding under or in connection with this Agreement, or (ii) for purposes of this Agreement, continuing to apply GAAP as in effect prior to such change in GAAP.

“GAAP” means generally accepted accounting principles in the United States of America as in effect at the time of any particular computation or determination or as of the date of the relevant financial statements, as the case may be.

12.3 The Ordinary Income (as defined in Schedule 3) for any period shall be adjusted by the addition of the Ordinary Income of any acquisition made during that period as if such acquisition had occurred on the first day of the period. At the request of the Lender, the Borrower shall provide supporting documents reasonably satisfactory to the Lender relating to the Ordinary Income of the acquisition.

12.4 Should the Equity Ratio fall below 15.00% as a result of an acquisition financed with debt,

(i) the Borrower shall have sixty (60) days from the date of the acquisition to cure the cause (or have UGI Corporation cure the cause) of such a change, and

(ii) the Borrower shall immediately provide (or have UGI Corporation provide) reasonable evidence that a cure is possible within the 60 day period, and

(iii) within 30 days of completing an acquisition that would, in its opinion, cause such a change in the Equity Ratio, the Borrower shall provide (or have UGI Corporation provide) a reasonable explanation of the acquisition and a detailed calculation of the Equity Ratio as of the date of the acquisition, and,

(iv) upon curing the cause of such a change of the Equity Ratio, the Borrower shall provide (or have UGI Corporation provide) a reasonable explanation of the cure and a detailed calculation of the Equity Ratio that reflects the cure.

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13. MISCELLANEOUS

13.1 If any of the provisions of this Agreement are or become invalid or unenforceable in any respect, the validity and enforceability of the remaining provisions shall not in any way be affected or impaired.

13.2 Any notice or communication under or in connection with this Agreement shall be in writing and shall be delivered by mail, fax, courier or email to the addresses given in this Agreement or at such other address as the recipient may have notified to the other party, in writing.

13.3 The Borrower may not assign, pledge or dispose otherwise of any of its rights or claims under or in connection with this Agreement without the prior written consent of the Lender.

13.4 The Lender may grant participations, and/or assign or transfer any or all of its rights or claims under or in connection with this Agreement to other financial institutions with the prior written consent of the Borrower only, which consent shall not be unreasonably withheld. Such consent, however, shall not be required for the granting of participations, nor for any assignment or transfer, to any members of the Raiffeisen Banking Group.

13.5 No failure by the Lender to exercise, nor any delay by the Lender in exercising, any right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise thereof or the exercise of any other right or remedy. The rights and remedies provided herein are cumulative and not exclusive of any rights or remedies provided by law.

13.6 The Borrower hereby irrevocably agrees to the electronic processing of all information and data concerning the Borrower and/or any of its affiliated companies which become known to the Lender in the course of the business relationship with the Borrower or any of its affiliated companies, and to the disclosure and forwarding of such information and data (except information and data regarding confidential know-how of the Borrower or any of its affiliates as well as confidential business or financial information explicitly identified by the Borrower in writing as being confidential as required by any law or legal regulation applicable to the Borrower or to any of its affiliates) within the internal organization of the Lender as well as to any domestic or foreign member companies of the Raiffeisen Banking Group and any (potential) parties of syndication or risk participation or security agreements. Prior to releasing any information or data to other parties (including companies of the Raiffeisen Banking Group) provided by the Borrower, the Lender shall enter into a written confidentiality agreement with the recipient of such information or data requiring it to maintain the confidentiality of the information or data, whereby such recipient shall be entitled to electronically process the information or data for internal use.

Loan Offer page 14

13.7 All present and future obligations under or in connection with this Agreement have to be fulfilled at the Lender’s premises at Am Stadtpark 9, 1030 Vienna.

13.8 In addition to the terms of this Agreement, the General Terms and Conditions (Version 2001) of the Lender shall apply subsidiarily.

13.9 This Agreement shall be governed by and construed in accordance with the Austrian law. Under this Agreement, a Business Day means a day (other than a Saturday or Sunday) on which banks are open for general business in Vienna/Austria, and which is (in relation to any date for payment or purchase of EURO) a TARGET Day (“TARGET” meaning Trans-European Automated Real-time Gross Settlement Express Transfer payment system).

13.10  Any dispute, controversy or claim arising out of or in connection with this Agreement shall non exclusively be settled by the competent commercial court of Vienna.

UNQUOTE

The present offer shall be irrevocably valid and binding until 30 September 2006. If you accept this offer, we shall pay you an up-front fee of EURO 100 flat. You can accept this offer by debiting our account no. 1-00.640.763 with such up-front fee. You are hereby irrevocably authorized to make such debit entry. Upon such debit entry only, the present offer shall be validly accepted irrespective of whether and when we will be informed of your acceptance.

Kind regards

Flaga GmbH

Schedule 1	List of Condition Precedent Documents
Schedule 2	Mandatory Cost Formulae
Schedule 3	Ratios and Manner of Calculation

Loan Offer page 15

SCHEDULE 1

Condition Precedent Documents

1. A duly executed original of each Finance Document.

2. A copy of the constitutional documents of the Borrower and the Guarantor (individually also an “Obligor”).

3. An extract of the commercial (or equivalent) register of each Obligor.

4. A copy of a resolution of the directors, the board of directors or any other relevant board, body or person of each Obligor:

(i) approving the terms of, and the transactions contemplated by, the Finance Documents to which an Obligor is a party and resolving to execute the Finance Documents to which it is a party;

(ii) authorizing a specified person or persons to execute the Finance Documents to which it is a party on its behalf; and

(iii) authorizing a specified person or persons, on its behalf, to sign and/or dispatch all documents, notices and other communication to be signed and/or dispatched by it under or in connection with the Finance Documents to which it is a party.

5. A specimen of the signature of each person authorized by the resolution referred to in point 4 (iii) above.

6. A certificate provided by an authorized signatory of the relevant Obligor certifying that each copy document relating to it specified in this schedule 1 is true and correct, complete and in full force and effect as at a date no earlier than the entry into this Agreement.

7. A duly executed original of a letter from the process agent referred to in clause 13 of the Guarantee Agreement confirming that it has been appointed by the relevant Obligor and that it has accepted such appointment.

Loan Offer page 16

8. A duly executed original of a legal opinion by Morgan Lewis & Bockius LLP, Philadelphia, USA, in respect of the Guarantee Agreement.

9. Any other document or evidence the Lender may reasonably require.

Loan Offer page 17

SCHEDULE 2

Mandatory Cost Formulae

1. The Mandatory Cost is an addition to the interest rate to compensate the Lender for the cost of compliance with (a) the new requirements of any national bank (b) in either case, new requirements of any other authority which replaces all or any of its functions, (c) the new requirements of the European Central Bank (in this Clause 1, “new requirements” means requirements introduced and coming into force after the Date of this Agreement).

2. On the first day of each Interest Period (or as soon as possible thereafter) the Lender shall calculate, as a percentage rate, a rate (hereinafter referred to as the “Additional Cost Rate”) in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Lender as a weighted average of the Lender’s Additional Cost Rates and will be expressed as a percentage rate per annum.

3. The Additional Cost Rate for the Lender will be the percentage notified by the Lender as the cost of complying with the minimum reserve requirements of the Austrian National Bank and/or any other authorities referred to in Clause 1 above.

4. Any determination by the Lender pursuant to this schedule 2 in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to the Lender shall, in the absence of manifest error, be conclusive and binding on all parties to this Agreement.

5. The Lender may from time to time, after consultation with the Borrower, determine and notify to the Borrower any amendments which are required to be made to this schedule 2 in order to comply with any change in law, regulation or any requirements from time to time imposed by the Austrian National Bank and/or any other authorities referred to in Clause 1 above, and any such determination shall, in the absence of manifest error, be conclusive and binding on all parties to this Agreement.

Loan Offer page 18

SCHEDULE 3

Ratios; Manner of Calculation

I.) Ratios.

Certain financial ratios of UGI Corporation (on a consolidated basis) (individually a “Ratio” and collectively the “Ratios”) are defined as follows:

Equity Ratio as % of total assets means Total Equity divided by Average Adjusted Total Assets.

Return on Assets means Ordinary Income divided by Average Adjusted Total Assets.

Debt Amortization Period means Net Debt divided by EBTDA.

whereas the meaning of capitalized terms shall be as follows:

TOTAL EQUITY means Total Stockholders’ Equity according to quarterly/annual report plus Minority Interests.

AVERAGE ADJUSTED TOTAL ASSETS means the sum of Total Assets according to quarterly/annual report for each of the past four (4) financial quarters divided by four (4).

ORDINARY INCOME means operating income according to quarterly/annual reports.

EBTDA means Ordinary Income plus Depreciation and Amortization minus Interest Expense.

NET DEBT means Current Maturities of Long Term Debt plus Bank Loans plus Long Term Debt (altogether “INTEREST-BEARING LIABILITIES”) minus Cash and cash equivalents minus Short-term investments.

II.) Manner of Calculating Ratios:

The Ratios shall be calculated by the Lender in accordance with the terms set forth in this schedule 3 on the basis of the consolidated financial statements of UGI Corporation to be provided pursuant to clause 10.1 (ii), beginning with the consolidated quarterly financial statements of UGI Corporation for the first calendar quarter of 2006. UGI Corporation may, at its discretion, provide its calculation of such Ratios together with the submission of the financial statements that are required to be submitted pursuant to clause 10.1 (ii). For the sake of clarification, however, it is hereby stated that only the calculation by the Lender is relevant for the purpose of this Agreement.

Loan Offer page 19

EX-10.7

Exhibit 10.7

The taking of the original of this document or any certified copy thereof, including written confirmations or references thereto, into the Republic of Austria may cause Austrian stamp duty to be assessed by the Austrian tax authorities. Keep the original document, as well as all certified copies thereof, including written confirmations or references thereto, outside of the Republic of Austria.

GUARANTEE AGREEMENT

entered into by and between

UGI Corporation, 460 North Gulph Road, King of Prussia, PA 19406, USA, fax number 001-610-992-3258 (“UGI”), as guarantor

and

Raiffeisen Zentralbank Österreich Aktiengesellschaft, Am Stadtpark 9, 1030 Vienna, Austria, fax number +43-1-71707-1086 (“RZB”), as beneficiary.

WHEREAS:

(A) Flaga GmbH, an Austrian company registered under FN 185471 b in the companies book (Firmenbuch) of the Landesgericht Korneuburg with its seat at Leobendorf and its business address at Flaga Straße 1, 2100 Leobendorf (the “Borrower”) intends to extend to RZB a written offer (the “Offer”) to enter into a term loan agreement in the amount of EURO 48,000,000 (the “Loan Agreement”) as attached to this Guarantee Agreement as Annex I.

(B) The Offer has not been extended, and the Loan Agreement has not been concluded to date.

(C) The Offer provides that UGI guarantees the payment of all amounts payable by the Borrower under or in connection with the Loan Agreement when due.

(D) UGI is willing to issue, and RZB is willing to accept such guarantee subject to the terms of this Guarantee Agreement.

NOW, THEREFORE, it is hereby agreed as follows:

1. UGI hereby confirms that it has taken notice of all terms of the Offer.

2. UGI hereby irrevocably agrees that the Loan Agreement be entered into in accordance with the terms of the Offer.

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3. As a guarantor according to Section 1357 of the Austrian Civil Code (“Bürge und Zahler” gemäß § 1357 ABGB), UGI hereby irrevocably guarantees in favor of RZB that the Borrower will duly fulfill all its present and future obligations under or in connection with the Loan Agreement (hereinafter collectively referred to as the “Secured Obligations”) including, without limitation, all obligations to repay principal, to pay interest and fees and, further, all payment obligations to RZB in the event that the Loan Agreement or any part thereof is or becomes invalid for any reason whatsoever. Whenever RZB does not receive full payment in respect of any of the Secured Obligations when due, UGI shall make such payment(s) under this Guarantee Agreement within 15 (fifteen) calendar days from receipt of a respective payment request by RZB. Such payment request shall be in writing and shall be delivered by registered mail, by express mail service or by personal delivery to the address of UGI (to the attention of the Corporate Secretary) given in this Guarantee Agreement or at such other address UGI may have notified to RZB in writing after the signing of this Guarantee Agreement. Each payment request sent by registered mail or by express mail service shall be deemed duly received by UGI on the fifth calendar day after the date of its dispatch by RZB, provided that RZB has, on the day of such dispatch, either dispatched by registered mail or by express mail service, or delivered by personal delivery, a copy of the same payment request to the process agent mentioned in Clause 13.

4. In addition, UGI hereby irrevocably covenants, undertakes and, further, guarantees in favor of RZB according to Section 880a second case of the Austrian Civil Code (“Erfolgsgarantie” gemäß § 880a zweiter Fall ABGB) that, from the signing of this Guarantee Agreement until the date on which the Loan Agreement will be terminated and RZB will have duly received payment in respect of all Secured Obligations:

(a) UGI is a corporation duly organized and validly existing under the laws of any State of the USA; and

(b) UGI has corporate power to enter into this Guarantee Agreement and to perform its obligations hereunder, and all necessary actions required to authorize its execution of this Guarantee Agreement and its performance of its obligations hereunder have been duly taken; and

(c) no government or other consents or exemptions are required to be obtained by UGI with respect to this Guarantee Agreement in order to give it validity, priority or make it enforceable or, if any such consents or exemptions are required to be obtained in order to give it validity, priority or make it enforceable, they have been or will be obtained in a timely manner, and such consents or exemptions are or will be in full force and effect, and all terms and conditions of any such consents or exemptions are and will be fully complied with in order to give it validity, priority or make it enforceable; and

(d) in order to give it validity, priority or make it enforceable, (i) this Guarantee Agreement is not required to be registered by, or sent to, any court or other authority,

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and (ii) no registration dues, taxes or similar charges are required to be paid in relation to this Guarantee Agreement; and

(e) UGl’s obligations under this Guarantee Agreement are legal, valid and binding and enforceable in accordance with their terms, and such obligations will rank at least pari passu with all its other obligations, except obligations to creditors having preference as a matter of mandatory law; and

(f) UGI’s execution and delivery of this Guarantee Agreement and the exercise of its rights and performance of its obligations hereunder do not:

(i) conflict with any agreement or obligation to which UGI is a party or which is binding upon it or any of its assets; or

(ii) conflict with UGI’s constitutive documents and internal rules and regulations; or

(iii) conflict with any law, regulation, judicial order or the like;

to an extent or in a manner having a material adverse effect on UGI; and

(g) UGI is not in breach or in default under any agreement to which it is a party or which is binding on it (or any of its assets) to an extent or in a manner which might have a material adverse effect on it; and

(h) to the best of UGI’s knowledge, all information supplied by UGI to RZB in connection with this Guarantee Agreement and the Loan Agreement is true, complete and accurate in all material respects; and

(i) UGI shall provide RZB with copies of its quarterly unaudited consolidated financial statements for each calendar quarter within forty-five (45) days after the end of the calendar quarter for which they have to be prepared, and with copies of its audited consolidated financial statements within ninety (90) days after the end of the financial period for which they have been or have to be prepared; and

(j) the Borrower is a company fully owned and controlled, either directly or indirectly, by UGI; and

(k) the Borrower is not insolvent in terms of the Austrian Insolvency Codes (Ausgleichs-und Konkursordnung).

4. All payments made or to be made by UGI under this Guarantee Agreement shall be effected in the same currency, in which the respective Secured Obligations are denominated, by transfer to any account indicated in the respective payment request of RZB free from and clear of, and without any deduction for or on account of any present or future taxes, imposts, levies, duties, charges, fees, withholdings or other deductions of any kind or nature whatsoever. Should any payments by UGI under this Guarantee Agreement be subject to any deductions whatsoever, UGI shall pay additional amounts equal to all amounts deducted with the effect

3

that RZB receives and retains all amounts it would have received and retained if no deductions were made.

5. If, as a result of a payment made by UGI under Clause 4, RZB will receive or be granted a credit against or remission for or deduction or relief from or in respect of any tax payable by it, which is both identifiable and quantifiable by RZB without requiring it to expend a material amount of time or incur a material cost in so identifying or quantifying (any of the foregoing, to the extent so identifiable and quantifiable, being referred to as a “Saving”), RZB shall, to the extent it can do so without prejudice to the retention of the relevant Saving and subject to UGl’s obligation to repay promptly on demand by RZB the amount to RZB if the relevant Saving is subsequently disallowed or cancelled, reimburse UGI promptly after receipt of such Saving by RZB with such amount.

6. Any costs and expenses, taxes and duties arising in connection with this Guarantee Agreement - including, without limitation, any duties under the Austrian Duties Act (öGebG) - shall in any event be borne and paid by UGI.

7. This Guarantee Agreement shall immediately enter into full force and effect. It shall expire when the Loan Agreement is terminated and all Secured Obligations are duly fulfilled.

8. UGI shall not acquire any rights or claims in connection with the Loan Agreement, nor shall UGI claim or accept payment or security in respect of its obligations arising from, or any payment(s) made under this Guarantee Agreement, until the Loan Agreement is terminated and RZB has duly received payment in respect of all Secured Obligations.

9. As regards the rights of RZB as set forth in clause 12.1 of the Loan Agreement (collectively the “Rights”), the following shall apply: RZB shall not exercise the Rights, provided that and as long as UGI duly complies with the provisions of this Guarantee Agreement. Under the terms of this Guarantee Agreement, UGI is deemed to duly comply with the provisions of this Guarantee Agreement, provided that UGI duly fulfills all present and future payment or other obligations under this Guarantee Agreement, and provided further that everything guaranteed by UGI pursuant to Clause 4 above is and remains true and correct.

10. Upon request of UGI, the parties hereto shall enter into negotiations for a reduction of the amounts secured under this Guarantee Agreement, subject to the amounts outstanding under the Loan Agreement, the overall credit standing of the Borrower and the equity ratio of the Borrower.

11. This Guarantee Agreement is governed by and construed in accordance with Austrian law.

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12. Any disputes arising in connection with this Guarantee Agreement (hereinafter referred to as the “Disputes”) - including, without limitation, Disputes regarding the existence or validity of this Guarantee Agreement or any part hereof, and Disputes arising in the event that this Guarantee Agreement or any part hereof is or becomes inexistent or invalid - the following shall apply:

(a) All Disputes shall be finally settled under the Rules of Arbitration and Conciliation of the International Arbitral Centre of the Austrian Federal Economic Chamber (Vienna Rules) by one or more arbitrators appointed in accordance with such Rules. The arbitral proceeding shall take place, and the arbitral award shall be rendered in Vienna, Austria. The language of arbitration shall be English.

(b) Notwithstanding the provision in Clause 12(a), RZB shall have the exclusive right to instigate any legal proceedings regarding Disputes in the Commercial Court of Vienna, Austria (Handelsgericht Wien), or in any other court - in Austria, in the United States of America or in any third country - that has or may have or accepts jurisdiction (either by virtue of any law or legal regulation, or by virtue of any agreement, or on any other grounds).

(c) In any arbitral or court proceeding, the substantive law of Austria shall be applicable.

13. The Pledgor hereby appoints Wilhelm Schneider, a notary whose principal address is Alser Strasse 23/16, 1080 Vienna, Austria, and his associate Markus Benn Ibler, or such other person the Pledgor may notify to the Pledgee after the entry into this Guarantee Agreement, as its agent for service of process in Austria, and service upon the Pledgor shall be deemed completed upon service to such agent for service of process, whether or not forwarded to or received by the Pledgor.

Bratislava, July 26, 2006

UGI Corporation	Raiffeisen Zentralbank Österreich Aktiengesellschaft
Assistant Secretary	AVP                                         AVP

5

Annex I

Term Loan Offer

6

Flaga GmbH

Flaga Straße 1

2100 Leobendorf

Austria

Raiffeisen Zentralbank Österreich

Aktiengesellschaft

Am Stadtpark 9

1030 Vienna

Austria Bratislava, 26 July 2006

Re: Term Loan Offer

Dear Sirs,

We, Flaga GmbH, an Austrian company registered under FN 185471 b in the companies book (Firmenbuch) of the Landesgericht Korneuburg, with its seat at Leobendorf and its business address at Flaga Straße 1, 2100 Leobendorf, herewith offer Raiffeisen Zentralbank Österreich Aktiengesellschaft to enter with us into the following term loan agreement (for the sake of clarification it is hereby stated that up to now such term loan agreement has not been entered into in whatever form):

Quote

Term Loan Agreement

entered into by and between

Flaga GmbH, Flaga Straße 1, 2100 Leobendorf, Austria (attention: Managing Director (Josef F. Weinzierl); email: weinzierl@flaga.at) (the “Borrower”),

and

Raiffeisen Zentralbank Österreich Aktiengesellschaft, Am Stadtpark 9, 1030 Vienna, Austria (attention: Brigitte Schuster; email: brigitte.schuster@rzb.at) (the “Lender”).

Loan Offer page 1

1. LOAN

1.1 Subject to the terms of this term loan agreement (“this Agreement”), the Lender makes available to the Borrower a non-revolving term loan (the “Loan”) in the aggregate amount of EURO 48,000,000.00 (forty-eight million) consisting of:

(i) Facility A (“Facility A”), which is a loan in the amount of EUR 38,895,000 (“Facility A Loan”), and

(ii) Facility B (“Facility B”), which is a loan in the amount of EUR 9,105.000 (“Facility B Loan”) fully refinanced by Oesterreichische Kontrollbank Aktiengesellschaff (“OeKB”), consisting of Tranche I in the amount of EUR 2,731,500 (“Tranche I”) and Tranche II in the amount of EUR 6,373,500 (“Tranche II”).

2. PURPOSE

2.1 The Borrower shall apply all amounts borrowed under Facility A in paying debts towards the Lender as presently shown on the Borrower’s account no. 1-00.640.763 with the Lender.

2.2 The Borrower shall apply all amounts borrowed under Facility B in re-financing its indirect acquisition of and continued investment in shares in the following companies through the Borrower’s ownership interest in Zentraleuropa LPG Holding GmbH (an Austrian joint venture holding company):

(i) CESKY PLYN K.S., Czech Republic;

(ii) PROGAS S.R.O., Slovakia;

(iii) PROGAS EUROGAZ SP.Z.O.O., Poland

(iv) EUROGAZ S.R.L, Romania;

(v) PROGAS S.A.; Romania;

(vi) THERMOFARM KFT, Hungary.

2.3 Except for its undertakings in clause 4.2, the Lender is not bound to monitor or verify the application of any amount borrowed under this Agreement.

3. CONDITIONS OF UTILIZATION

3.1 The Borrower may not deliver a utilization request for the drawing of the Loan unless the following conditions precedent have been fulfilled:

(i) This Agreement has been duly executed and come into full force and effect; and

Loan Offer page 2

(ii) the guarantee agreement referred to in clause 11.1 (i) (the “Guarantee Agreement”) and the share pledge agreement referred to in clause 11.1 (ii) (the Pledge Agreement”) have been duly signed and come into full force and effect; and

(iii) the security rights and interest of the Lender under the Guarantee Agreement and the Pledge Agreement (collectively the “Security Agreements”) have been created and perfected in a valid, binding and enforceable manner; and

(iv) the representations and warranties set forth in clause 9.1 are true and correct; and

(v) no event or circumstance as specified in clause 12.1 (a “Default”), which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an event of default as defined in clause 12.1 (an “Event of Default”), has occurred or threatens to occur; and

(vi) the Lender has received the documents and other evidence listed in schedule 1, and it has found such documents in form and substance acceptable and satisfactory to it; and

(vii) an agreement between the Lender and OeKB for the refinancing of utilizations under Facility B (the “OeKB Refinancing Agreement”) has been duly executed and come into full force and effect; and

(viii) the Lender has received from OeKB all funds under the OeKB Refinancing Agreement; and

(ix) the commitment by OeKB no. 23.765 dated 8 June 2006 to guarantee bills of exchange by “aval” in the amount of EUR 9,105,000 (the “OeKB Commitment”; this Agreement, the Security Agreements, and the OeKB Commitment are hereinafter collectively referred to as the “Finance Documents”) has been duly executed and come into full force and effect; and

(x) the Lender has received two (2) bills of exchange issued by the Lender, drawn on and accepted by the Borrower, and guaranteed by OeKB pursuant to the OeKB Commitment, one in the amount of EUR 2,731,500 due on 31 March 2008, and the other in the amount of EUR 6,373,500 due on 31 August 2011; and

(xi) the Lender has received evidence that the agreements regarding the acquisition of shares as referred to in clause 2.2 have been duly executed and come into full force and effect, and that the acquisition price in an aggregate amount of at least EUR 9,105,000 has been paid there under by the Borrower.

Loan Offer page 3

4. UTILIZATION, DISBURSEMENT

4.1 The Borrower may utilize the Loan in EURO by delivery to the Lender of a duly completed utilization request in the form of schedule 2 to be received by the Lender no later than 11 a.m. (Vienna time) on the day falling three (3) Business Days (as defined in the second paragraph of this clause 4.1) before the proposed disbursement date. Only one (1) utilization request may be delivered under this Agreement, the proposed Loan amount has to be EURO 48,000,000.00 (forty eight million), and the proposed disbursement date must not be later than 31 July 2006. The utilization request shall be irrevocable.

Under this Agreement, a Business Day means a day (other than a Saturday or Sunday) on which banks are open for general business in Vienna/Austria, and which is (in relation to any date for payment or purchase of EURO) a TARGET Day (“TARGET” meaning Trans-European Automated Real-time Gross Settlement Express Transfer payment system).

4.2 Subject to the terms of this Agreement, the Lender shall disburse to the Borrower the Loan amount on the disbursement date as proposed by the Borrower in its utilization request by transfer to the account no. 1-00.640.763 held by the Borrower with the Lender.

5. REPAYMENT, PREPAYMENT

5.1 The Borrower shall repay the outstanding Loan as follows:

(i) The Facility A Loan shall be repaid pursuant to the following repayment schedule:

on (each a “Repayment Date”) an amount of (each a “Repayment Amount”)

31 March 2007	EURO	3,000,000.00
30 September 2007	EURO	3,000,000.00
31 March 2008	EURO	268,500.00
30 September 2008	EURO	3,000,000.00
31 March 2009	EURO	3,000,000.00
30 September 2009	EURO	3,000,000.00
31 March 2010	EURO	3,000,000.00
30 September 2010	EURO	3,000,000.00
31 March 2011	EURO	3,000,000.00
30 September 2011	EURO	14,626,500.00

(ii) As regards the Facility B Loan, Tranche I shall be repaid in one installment on 31 March 2008, and Tranche II shall be repaid in one installment on 31 August 2011 (each a “Repayment Date”).

Loan Offer page 4

5.2 In addition to the repayments set forth in clause 5.1 (each a “Repayment”), the Borrower may prepay without penalty (other than Break Costs, if applicable pursuant to clause 7.4) the whole or any part of the outstanding Facility A Loan, provided that

(i) such prepayment (the “Prepayment”) can only be made on a Repayment Date after 30 September 2009; and

(ii) the Prepayment amount is EURO 5,000,000.00 (five million), a multiple thereof or the entire outstanding Loan; and

(iii) the Prepayment has been notified by the Borrower to the Lender no later than ten (10) Business Days before the Repayment Date on which it is made; and

(iv) the Prepayment is financed by and made from funds freely available to the Borrower, which it has received in form of equity contributions or intercompany loans from any of its direct or indirect shareholders or affiliates.

Each Prepayment shall be fully applied in reverse chronological order towards the Repayments as set forth in clause 5.1 (i).

5.3 In addition to the repayment dates set out in clause 5.1 (i) the Borrower may prepay without penalty the whole or any part of the outstanding Facility B Loan subject to the following:

(i) the Borrower shall – according to the terms of the OeKB Refinancing Agreement – give a month’s prior notice; and

(ii) the Borrower shall reimburse the Lender the OeKB Breakage Costs, if any. For the purpose of this clause, “OeKB Breakage Costs” means the cost demanded by OeKB from the Lender in relation to the refinancing of the Facility B Loan as a result of any such prepayment made by the Borrower under this Agreement including in particular costs and losses in connection with a re-arrangement of and amendment to funding agreements between the Lender and OeKB.

(iii) Each Prepayment shall be fully applied towards the Repayments in the order determined by OeKB in its discretion.

5.4 The Borrower may not re-borrow any amount repaid or prepaid under this Agreement.

Loan Offer page 5

6. INTEREST

6.1 As regards Facility A, each interest period shall be a period of one (1), two (2), three (3), six (6) or twelve (12) months as selected by the Borrower, provided that

(i) the first interest period shall commence on (and include) the day on which the Loan amount is disbursed, and it shall end on (and include) the last day of the calendar month in which the Loan amount is disbursed; and

(ii) each Repayment Date has to be the last day of an interest period; and

(iii) the last interest period shall end on 30 September 2011.

For each interest period, the Borrower shall provide the Lender with a duly completed selection notice in the form of schedule 3 to be received by the Lender no later than 11:00 a.m. (Vienna time) on the day falling three (3) Business Days before the first day of such interest period, failing which the respective interest period shall be one (1) month.

6.2 As regards Facility B, each calendar quarter shall be an interest period, provided that

(i) the first interest period shall commence on (and include) the day on which the Loan amount is disbursed, and it shall end on (and include) the last day of the calendar quarter in which the Loan amount is disbursed; and

(ii) the last interest period for Tranche I shall end on 31 March 2008; and

(iii) the last interest period for Tranche II shall end on 31 August 2011.

6.3 The rate of interest for each interest period shall be:

(i) on the outstanding Facility A portion of the Loan the percentage rate per annum which is the aggregate of:

(a) The applicable EURIBOR (as defined in clause 6.4); and

(b) the applicable Margin (as defined in clause 6.5); and

(c) the applicable Mandatory Cost, if any, being the percentage rate per annum calculated by the Lender in accordance with schedule 4.

Loan Offer page 6

(ii) on the outstanding Facility B portion of the Loan the percentage rate per annum which is the aggregate of:

(a) The OeKB Floating Export Finance Rate (as defined below) in respect of Tranche I, or the OeKB Fixed Export Finance Rate (as defined below) in respect of Tranche II; and

(b) the applicable Margin (as defined in clause 6.5); and

(c) the applicable Mandatory Cost, if any, being the percentage rate per annum calculated by the Lender in accordance with schedule 4.

“OeKB Floating Export Finance Rate” means the interest rate designated by OeKB as valid and applicable floating interest rate for the relevant, specific calendar quarter and appearing on OeKB’s internet homepage under www.oekb.at, or such other page as OeKB may specify from time to time, minus fifty (50) basis points per annum.

“OeKB Fixed Export Finance Rate” means the interest rate designated by OeKB as valid and applicable fixed interest rate for a refinancing granted during the relevant, specific calendar quarter and applicable for the term of such refinancing and appearing on OeKB’s internet homepage under www.oekb.at, or such other page as OeKB may specify from time to time, minus fifty (50) basis points per annum, which rate is, for the avoidance of doubt, 2.50% p.a.

6.4 “EURIBOR” means:

(i) the rate per annum (rounded up to three decimal places) for deposits in EURO for a term comparable to the relevant interest period which appears on the Reuters page “EURIBOR 01” (or any successor to such page) published or reported by REUTERS or such other electronic information service as selected by the Lender; or

(ii) if no such rate is then available, the rate which is determined by the Lender to be the arithmetic mean (rounded up to three decimal places) of the rates per annum for such deposits in EURO offered by three major banks on the European interbank market selected by the Lender, at or about 11 a.m. (Vienna time) on the second TARGET Day before the commencement of the respective interest period.

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6.5 The applicable Margin depends on certain financial ratios of UGI Corporation (on a consolidated basis) as defined in schedule 5 (individually a “Ratio” and collectively the “Ratios”) as follows:

Scenario	Financial Ratios of UGI Corporation *)	Applicable Margin
1)	RoA >= 12.0 DAP <= 2.5 ER >= 33.0	0.52%
2)	12.0 > RoA>= 9.25 2.5 < DAP <= 4.0 33.0 > ER >= 23.0	0.67%
3)	9.25 > RoA >= 7.5 4.0 < DAP <= 5.5 23.0 >ER >= 15.0	0.95%
4)	RoA < 7.5 DAP > 5.5 ER < 15.0	1.45%

*) “RoA” means Return on Assets (in %), “DAP” means Debt Amortization Period (in years), and “ER” means Equity Ratio as %.

The Ratios shall be calculated by the Lender in accordance with the terms set forth in schedule 5 on the basis of the consolidated financial statements of UGI Corporation to be provided pursuant to clause 10.1 (ii), beginning with the consolidated quarterly financial statements of UGI Corporation for the first calendar quarter of 2006. UGI Corporation may, at its discretion, provide its calculation of such Ratios together with the submission of the financial statements that are required to be submitted pursuant to clause 10.1 (ii). For the sake of clarification, however, it is hereby stated that only the calculation by the Lender is relevant for the purpose of this Agreement.

On the basis of such calculation made by it, the Lender shall fix the Margin on the basis of the weakest Ratio. To give an example: Even if only one Ratio falls within scenario 3 as set out in the above chart, the applicable Margin shall be 0.95%.

The Margin so fixed shall apply to all interest periods following the interest period in which the Lender has duly received the relevant consolidated financial statements of UGI Corporation until (and including) the interest period in which the Lender duly receives the next relevant consolidated financial statements of UGI Corporation in accordance with clause 10.1 (ii). In the event that the Lender does not duly receive consolidated financial statements of UGI Corporation in accordance with clause 10.1 (ii) for any reason whatsoever, a Margin of 1.45% shall apply to all interest periods following the interest period in which the Lender failed to duly receive the relevant consolidated financial statements of UGI Corporation until (and including) the interest period in which the Lender actually receives such consolidated financial statements of UGI Corporation.

For the sake of clarification it is hereby stated that no reduction of the applicable Margin will preclude a later increase of the applicable Margin in accordance with the terms of this clause, and vice versa.

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6.6 Interest shall be calculated for each interest period from the outstanding Loan amount (not taking into account any Loan amounts repaid or prepaid on the last day of such interest period) on the basis of actual number of days elapsed in a year of 360 days.

6.7 Interest shall be paid by the Borrower to the Lender for each portion of the Loan and associated interest period on the last day of the same interest period.

7. FEE, COSTS AND EXPENSES, INDEMNITIES

7.1 Upon the acceptance by the Lender of the present offer to enter into this Agreement the Borrower shall pay the Lender an up-front fee in the amount of EURO 95,000.00 (ninety-five thousand) flat.

7.2 The Borrower shall bear and pay all costs of the legal opinions mentioned in schedule 1. Furthermore, the Borrower shall bear, and it shall pay the Lender within seven (7) Business Days of demand by the Lender, all reasonable out of pocket costs and expenses of whatever nature incurred by the Lender, after the acceptance by the Lender of the present offer to enter into this Agreement, in connection with the implementation of this Agreement including, without limitation, costs and expenses arising in connection with the preservation, protection or enforcement of the Lender’s rights under this Agreement. Moreover, the Borrower shall bear, and it shall pay the Lender within seven (7) Business Days of demand by the Lender, any taxes or duties of whatever nature incurred by the Lender in connection with any of the Finance Documents including, without limitation, taxes or duties arising under the Austrian Duties Act (österreichisches Gebührengesetz).

7.3 The Borrower shall, within seven (7) days of demand by the Lender, reimburse the Lender for any incremental costs incurred by the Lender, after the acceptance by the Lender of the present offer to enter into this Agreement, in connection with the making or maintaining of, or the commitment to make, the Loan which result from the introduction of, or any change in, any applicable law or other legal regulation, or any change in the interpretation or application thereof by any governmental or regulatory authority charged with the administration thereof. The Borrower shall not be required to reimburse the Lender for increased costs attributable to any change in the rate of tax on the general income of Lender, or amounts the Lender has been compensated for pursuant to clause 8.2.

If the Borrower is required by the Lender to pay any incremental costs under the first paragraph of this clause 7.3, the Borrower may whilst the relevant circumstances continue, without prejudice to its obligations under the first paragraph of this clause 7.3, prepay the entire outstanding Loan on any Repayment Date without prepayment penalty (other than Break Costs, if applicable pursuant to clause 7.4), provided that such Prepayment has been

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notified by the Borrower to the Lender no later than ten (10) Business Days before the Repayment Date on which it is made.

7.4 The Borrower shall, within seven (7) Business Days of demand by the Lender, pay the Lender its Break Costs (as defined in the second paragraph of this clause 7.4) attributable to all or any part of a Loan being paid to the Lender on a day other than a Repayment Date for that Loan, or attributable to all or any part of an Unpaid Sum (meaning any sum due but unpaid to the Lender under or in connection with the Finance Documents) being paid to the Lender on a day other than the due date of such Unpaid Sum.

“Break Costs” means

the amount (if any) by which:

(i) the interest which the Lender should have received for the period from the date of receipt of all or any part of a Loan or Unpaid Sum to the last day of the then current Interest Period in respect of that Loan or Unpaid Sum, had the Loan amount or Unpaid Sum received been paid on the last day of that Interest Period;

exceeds:

(ii) the amount which the Lender would be able to obtain by placing an amount equal to the Loan amount or Unpaid Sum received by it on deposit with a leading bank in the European interbank market for a period starting on the Business Day following receipt or recovery and ending on the last day of the then current Interest Period.

7.5 Notwithstanding, and without prejudice to, any other rights and claims of the Lender, the Borrower shall, within seven (7) Business Days of demand by the Lender, indemnify the Lender against any cost, loss or liability reasonably incurred by the Lender as a result of:

(i) the occurrence of any Event of Default; and/or

(ii) a failure by the Borrower to comply with any of its obligations under or in connection with this Agreement; and/or

(iii) funding, or making arrangements to fund, any Loan requested by the Borrower but not made by reason of the operation of any provisions of this Agreement (other than by reason of default or negligence by that Lender alone); and/or

(iv) the Loan (or part of the Loan) not being prepaid in accordance with a notice of Prepayment given by the Borrower.

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7.6 The Borrower shall promptly, by latest within seven (7) Business Days of demand by the Lender, pay the Lender the amount of all costs and expenses payable by the Lender to OeKB in connection with the OeKB Refinancing Agreement and/or the OeKB Commitment.

7.7 The Borrower shall pay when due all amounts payable by it to OeKB in connection with the OeKB Commitment. As at the date of the present offer to enter into this Agreement, the Borrower has to pay OeKB for each calendar quarter in advance a fee for the OeKB Commitment (Wechselbürgschaftsentgelt) at a rate of 0.2% (zero point two percent) per annum calculated on the outstanding amount under Facility B at the beginning of each calendar quarter. The first payment of the fee will be calculated from the date of the drawdown of the Facility B Loan until the end of the calendar quarter in which the drawdown was made.

8. PAYMENTS

8.1 All payments due from the Borrower under this Agreement shall be

(i) debited by the Lender with value of the relevant due date to the account no. 1-00.640.763 held by the Borrower with the Lender, and

(ii) made by the Borrower no later than 11:00 a.m. (Vienna time) on the relevant due date by transfer to the same account.

Payment shall be made in EURO for value on the due date, and it shall be made in full without any withholding or other deduction of any kind or nature (whether in respect of set-off, counterclaim, taxes, duties, charges or otherwise whatsoever).

8.2 If the Borrower is required by law or otherwise to make any withholding or other deduction whatsoever in respect of any amount due under this Agreement, and the Borrower makes such deduction, the Borrower shall increase the sum payable to the Lender in respect of which such deduction was made to the extent necessary to ensure that, after making such deduction, the Lender receives and retains (free from any liability in respect of any such deduction) a net sum equal to the sum which it would have received and so retained had no such deduction been made by the Borrower.

8.3 If, as a result of a payment made by the Borrower under clause 8.2, the Lender has received or been granted a credit against or remission for or deduction or relief from or in respect of any tax payable by it, which is both identifiable and quantifiable by the Lender without requiring it to expend a material amount of time or incur a material cost in so identifying or quantifying (any of the foregoing, to the extent so identifiable and quantifiable, a “Saving”), the Lender shall, to the extent it can do so without prejudice to the retention of the relevant Saving and subject to the Borrower’s obligation to repay promptly on demand by the Lender

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the amount to the Lender if the relevant Saving is subsequently disallowed or cancelled, reimburse the Borrower promptly after receipt of such Saving by the Lender with such amount.

8.4 Any sum due to be paid under this Agreement on a day which is not a Business Day shall be paid on the last preceding Business Day.

8.5 If the Borrower fails to pay any amount payable by it under this Agreement on its due date, the Borrower shall pay default interest on such overdue amount from (and including) the due date up to (and including) the date of actual payment at a rate of three (3) per cent per annum. Default interest shall be paid in addition to interest payable under clause 6. Default interest shall be immediately payable by the Borrower on demand by the Lender. Default interest (if unpaid) arising on an overdue amount will be compounded with such overdue amount at the end of each interest period applicable to that overdue amount but will remain immediately due and payable. Default interest shall be calculated on the basis of the actual number of days elapsed in a year of 360 days.

9. REPRESENTATIONS AND WARRANTIES

9.1 The Borrower represents and warrants to the Lender that:

(i) The Borrower is a company duly established and validly existing under the laws of Austria having its corporate seat and head office in Austria;

(ii) The Borrower has the corporate power to own its assets and to carry on its business as it is being conducted;

(iii) the Borrower has the corporate power to enter into this Agreement and to perform its obligations hereunder, and all necessary action to authorize its entry into this Agreement and its performance hereof has been duly taken;

(iv) each of the Finance Documents is a legal, valid and binding agreement enforceable in accordance with its terms, and the security rights and interest of the Lender under the Security Agreements are legal, valid and binding security rights and interest enforceable in accordance with their terms;

(v) the Borrower has taken no corporate action, and no other steps or legal proceedings have been started or, to the best of the Borrower’s knowledge, threatened against it, for its winding-up, dissolution, administration or re-organization or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of it or of all or any material part of its assets or revenues;

(vi) no Default has occurred or will occur as a result of making the Loan, and the Borrower is not in breach or in default under any agreement or other

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instrument to which it is a party or which is binding on it (or any of its assets) to an extent or in a manner which would be reasonably likely to have a material adverse effect on it;

(vii) no litigation, arbitration or administrative proceeding of or before any court, arbitral body or agency has been started or, to the best of the Borrower’s knowledge, threatened against the Borrower which, if adversely determined, would be reasonably likely to have a material adverse effect on the Borrower;

(viii) to the best of the Borrower’s knowledge, all information supplied by the Borrower or any of its direct or indirect shareholders to the Lender in connection with this Agreement is true, complete and accurate in all material respects;

(ix) the Borrower’s entering into this Agreement and its exercise of its rights and performance of its obligations hereunder do not and will not conflict with any material agreement or material obligation to which the Borrower is a party or which is binding upon it or any of its assets, or conflict with its constitutive documents and internal rules and regulations;

(x) the Borrower is not and will not be insolvent in terms of the Austrian Insolvency Codes (Ausgleichs- und Konkursordnung);

(xi) the Borrower is and will remain a company fully owned and controlled, either directly or indirectly, by UGI Corporation, 460 North Gulph Road, King of Prussia, PA 19406, USA (“UGI Corporation”); and

(xii) the payment obligations of the Borrower under this Agreement rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors.

9.2 The representations and warranties set out in clause 9.1 are deemed to be repeated by the Borrower (by reference to the facts and circumstances then existing) on each day from the entry into this Agreement to and including the day on which the Finance Documents are terminated and all rights and claims of the Lender under or in connection with the Finance Documents are duly fulfilled.

10. COVENANTS AND UNDERTAKINGS

10.1 The Borrower covenants and undertakes, from the entry into this Agreement to and including the day on which the Finance Documents are terminated and all rights and claims of the Lender under or in connection with the Finance Documents are duly fulfilled, that:

(i) the Borrower shall provide to the Lender such information in relation to its business, operations and financial position as the Lender may reasonably require;

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(ii) the Borrower shall provide, or cause UGI Corporation to provide, the Lender with copies of the audited consolidated financial statements of UGI Corporation within ninety (90) days after the end of the period for which they have been prepared, and copies of the unaudited quarterly consolidated financial statements of UGI Corporation within forty-five (45) days after the end of the period for which they have been prepared;

(iii) the Borrower shall notify the Lender of the occurrence of any Default and/or Event of Default;

(iv) the Borrower shall take out and maintain, or ensure that any of its affiliates takes out and maintains, insurance cover over the Borrower’s assets and other appropriate insurance cover including, but not limited to insurance cover for interruption of business and general liability, of a type and in an amount which is consistent with good business practice;

(v) the Borrower shall ensure that its obligations under this Agreement do and will always rank at least pari passu with its other secured and unsecured obligations, other than obligations to creditors having preference as a matter of mandatory law and other than obligations which already exist and have preference when this Agreement is concluded; as regards the latter obligations, the Borrower shall use reasonable best efforts to provide promptly that such obligations having a material adverse impact on its ability to comply with the terms of this Agreement will have no preference in respect of its obligations under this Agreement;

(vi) the Borrower shall not create or permit to exist any collateral or security interest in favor of one or more third parties on the whole or any part of its present or future property, assets or revenues, without the prior written consent of the Lender which shall not be unreasonably withheld. The provision in the first sentence of this clause 10.1 (vi) shall not apply in respect of collateral or security interest created in the ordinary course of business, provided that such collateral or security interest has no material negative impact on the Borrower’s ability to perform under this Agreement;

(vii) the Borrower shall not, without the prior written consent of the Lender which shall not be unreasonably withheld, either in a single transaction or in a series of transactions whether related or not and whether voluntarily or involuntarily, sell, transfer, lease or otherwise dispose of all or a substantial part of its property or assets. The provision in the first sentence of this clause 10.1 (vii) shall not apply in respect of dispositions in the ordinary course of business, provided that such dispositions have no

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negative impact on the Borrower’s ability to perform under this Agreement;

(viii) other than

(a) intercompany loans in favor of the Borrower’s subsidiaries (including, without limitation, Progas Austria) and the existing loan in the amount of EUR 11,407,482 granted by the Borrower to UGI France, Inc. (now known as UGI Europe, Inc.), and

(b) the Borrower’s undertakings set forth in that certain shareholders’ agreement regarding Zentraleuropa LPG Holding GmbH (as presented by the Borrower to the Lender prior to the entry into this Agreement) so long as the Borrower holds and controls a share of at least 50% in Zentraleuropa LPG Holding GmbH,

the Borrower shall not make any loans or grant any credit or other financing of any kind to or for the benefit of any person or otherwise voluntarily assume any liability, whether actual or contingent, in respect of the obligations of any other person, except within the ordinary course of business, or with the prior written consent of the Lender not to be unreasonably withheld, provided always that such loans, credits, other financings or liabilities have no material negative impact on the Borrower’s ability to perform under this Agreement;

(ix) the Borrower hereby irrevocably grants a right of first refusal for any and all of its present and future lending transactions in favor of the Lender. It is understood that the Borrower shall have the right to solicit offers from other banks in respect of such transactions. However, the Lender shall have the right to enter into any or all of such transactions, and to provide all related services, at competitive market conditions, if among the banks , making offers, the Lender’s offer is at least as competitive as the best offer made among the other banks. It is understood that the Borrower shall not accept a Lender’s offer not made at competitive market conditions;

(x) the Borrower shall promptly upon demand by the Lender provide, or cause UGI Corporation to provide, the Lender with any and all documents and other information regarding the Borrower or any of the companies mentioned in clause 2.2(i) to (vi), which OeKB may request, and/or which have to be furnished by the Lender to OeKB, in connection with the OeKB Refinancing Agreement and/or the OeKB Commitment; and

(xi) the Borrower shall promptly inform the Lender about any and all changes regarding the share quota held by it indirectly in any of the companies mentioned in clause 2.2(i) to (vi), or regarding the purpose of its acquiring or holding of a share in any of such companies.

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11. SECURITY

11.1 As security for all present and future rights and claims of the Lender under or in connection with this Agreement the following shall apply:

(i) Under a separate guarantee agreement in form and substance satisfactory to the Lender (the “Guarantee Agreement”), UGI Corporation issues a guarantee in favor of the Lender according to Section 1357 of the Austrian Civil Code (§ 1357 ABGB); and

(ii) under a separate pledge agreement in form and substance satisfactory to the Lender, Eastfield International Holdings, Inc. grants the Lender a first priority pledge over all shares in the Borrower.

12. DEFAULT

12.1 In the event that:

(i) the Borrower defaults in the payment on the due date of any amount due and payable to the Lender under this Agreement and/or under any other present or future agreement for more than five days; or

(ii) the Borrower is in material breach of any of the terms and conditions of this Agreement and/or any other present or future agreement with the Lender (other than those referred to in clause 12.1(i)) and, in the case of a breach that is capable of remedy, such breach is not remedied within thirty days after the occurrence of such breach; or

(iii) any of the representations or warranties of the Borrower under this Agreement, or any of the opinions expressed in the legal opinion mentioned in schedule 1, proves to be or becomes incorrect, or any certificate, statement or notice issued to the Lender in connection with this Agreement proves to be or becomes incorrect in a material respect; or

(iv) a material adverse change in the economic situation of the Borrower occurs or threatens to occur; or

(v) any of the following Ratios (as defined in and calculated according to clause 6.5) is achieved:

(a) the Return on Assets is lower than 6,50% (six point five percent), or

(b) the Debt Amortization Period is equal to or longer than 6,75 (six point seventy five) years, or

(c) the Equity Ratio is lower than 15,00% (fifteen percent);

(each an Event of Default), the Lender shall at any time be entitled to terminate this Agreement (whereupon this Agreement shall be terminated with immediate effect), and/or to declare, in whole or in part, any amount(s) outstanding to it under or in

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connection with this Agreement due and payable (whereupon the respective amounts shall become due and payable with immediate effect).

12.2 If, as a result of any change in GAAP (as defined in the last paragraph of this clause 12.2) after the entry into this Agreement, a change of the scenario set out on the chart under clause 6.5 (the “Scenario”) - either an upward change (for example from Scenario 3 to Scenario 2) or a downward change (for example from Scenario 2 to Scenario 3) shall have occurred or in the opinion of UGI would be likely to occur, which change would not have occurred or would not have been likely to occur had no change in GAAP taken place:

(i) such change of Scenario shall not be considered to constitute an Event of Default or potential Event of Default, and

(ii) in the event of either an upward or downward change of Scenario; the Borrower shall provide the Lender with a detailed calculation based upon (a) GAAP prior to the change and (b) GAAP after the change, with a reasonable explanation for the differences, and

(iii) the parties shall negotiate in good faith an amendment to this Agreement which shall approximate to the extent possible the economic effect of the original Ratios taking into account such change in GAAP.

If the parties do not agree on such amendment within sixty (60) days from the date on which the Borrower first notifies the Lender of such change in GAAP, the Borrower shall have the option of (i) prepaying in full the Loan and all other amounts outstanding under or in connection with this Agreement, or (ii) for purposes of this Agreement, continuing to apply GAAP as in effect prior to such change in GAAP.

“GAAP” means generally accepted accounting principles in the United States of America as in effect at the time of any particular computation or determination or as of the date of the relevant financial statements, as the case may be.

12.3 The Ordinary Income (as defined in Schedule 5) for any period shall be adjusted by the addition of the Ordinary Income of any acquisition made during that period as if such acquisition had occurred on the first day of the period. At the request of the Lender, the Borrower shall provide supporting documents reasonably satisfactory to the Lender relating to the Ordinary Income of the acquisition.

12.4 Should a change of Scenario occur because of a change in the Equity Ratio that results from an acquisition financed with debt,

(i) the Borrower shall have sixty (60) days from the date of the acquisition to cure the cause (or have UGI Corporation cure the cause) of such a change in Scenario, and

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(ii) the Borrower shall immediately provide (or have UGI Corporation provide) reasonable evidence that a cure is possible within the 60 day period, and

(iii) within 30 days of completing an acquisition that would, in its opinion, cause such a change in Scenario, the Borrower shall provide (or have UGI Corporation provide) a reasonable explanation of the acquisition and a detailed calculation of the Equity Ratio as of the date of the acquisition, and,

(iv) upon curing the cause of such a change of Scenario, the Borrower shall provide (or have UGI Corporation provide) a reasonable explanation of the cure and a detailed calculation of the Equity Ratio that reflects the cure.

13. MISCELLANEOUS

13.1 If any of the provisions of this Agreement are or become invalid or unenforceable in any respect, the validity and enforceability of the remaining provisions shall not in any way be affected or impaired.

13.2 Any notice or communication under or in connection with this Agreement shall be in writing and shall be delivered by mail, fax, courier or email to the addresses given in this Agreement or at such other address as the recipient may have notified to the other party in writing.

13.3 The Borrower may not assign, pledge or dispose otherwise of any of its rights or claims under or in connection with this Agreement without the prior written consent of the Lender.

13.4 The Lender may grant participations, and/or assign or transfer any or all of its rights or claims under or in connection with this Agreement, to other financial institutions with the prior written consent of the Borrower only, which consent shall not be unreasonably withheld. Such consent, however, shall not be required for the granting of participations, nor for any assignment or transfer, to OeKB (with respect to Facility B only) or any members of the Raiffeisen Banking Group.

13.5 No failure by the Lender to exercise, nor any delay by the Lender in exercising, any right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise thereof or the exercise of any other right or remedy. The rights and remedies provided herein are cumulative and not exclusive of any rights or remedies provided by law.

13.6 The Borrower hereby irrevocably agrees to the electronic processing of all information and data concerning the Borrower and/or any of its affiliated companies which become known to the Lender in the course of the business

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relationship with the Borrower or any of its affiliated companies, and to the disclosure and forwarding of such information and data (except information and data regarding confidential know-how of the Borrower or any of its affiliates as well as confidential business or financial information explicitly identified by the Borrower in writing as being confidential as required by any law or legal regulation applicable to the Borrower or to any of its affiliates) within the internal organization of the Lender as well as to any domestic or foreign member companies of the Raiffeisen Banking Group and any (potential) parties of syndication or risk participation or security agreements. Prior to releasing any information or data to other parties (including companies of the Raiffeisen Banking Group) provided by the Borrower, the Lender shall enter into a written confidentiality agreement with the recipient of such information or data requiring it to maintain the confidentiality of the information or data, whereby such recipient shall be entitled to electronically process the information or data for internal use.

13.7 All present and future obligations under or in connection with this Agreement have to be fulfilled at the Lender’s premises at Am Stadtpark 9, 1030 Vienna.

13.8 In addition to the terms of this Agreement, the General Terms and Conditions (Version 2001) of the Lender shall apply subsidiarily.

13.9 This Agreement shall be governed by and construed in accordance with the Austrian law.

13.10  Any dispute, controversy or claim arising out of or in connection with this Agreement shall non exclusively be settled by the competent commercial court of Vienna.

UNQUOTE

The present offer shall be irrevocably valid and binding until 31 July 2006. You can accept this offer by debiting our account no. 1-00.640.763 with the up-front fee mentioned in clause 7.1. You are hereby irrevocably authorized to make such debit entry. Upon such debit entry only, the present offer shall be validly accepted irrespective of whether and when we will be informed of your acceptance.

Kind regards

Flaga GmbH

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Schedule 1	List of Condition Precedent Documents
Schedule 2	Form of Utilization Request
Schedule 3	Form of Selection Notice
Schedule 4	Mandatory Cost Formulae
Schedule 5	Definition of Ratios

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SCHEDULE 1

Condition Precedent Documents

1. A duly executed original of each Finance Document.

2. the OeKB Refinancing Agreement

3. A copy of the constitutional documents of the Borrower, the Guarantor and the Pledgor (individually also an “Obligor”).

4. An extract of the commercial (or equivalent) register of each Obligor.

5. A copy of a resolution of the directors, the board of directors or any other relevant board, body or person of each Obligor:

(i) approving the terms of, and the transactions contemplated by, the Finance Documents to which an Obligor is a party and resolving to execute the Finance Documents to which it is a party;

(ii) authorizing a specified person or persons to execute the Finance Documents to which it is a party on its behalf; and

(iii) authorizing a specified person or persons, on its behalf, to sign and/or dispatch all documents, notices and other communication (including, without limitation, any Utilization Request and Selection Notice) to be signed and/or dispatched by it under or in connection with the Finance Documents to which it is a party.

6. A specimen of the signature of each person authorized by the resolution referred to in point 5(iii) above.

7. A certificate provided by an authorized signatory of the relevant Obligor certifying that each copy document relating to it specified in this schedule 1 is true and correct, complete and in full force and effect as at a date no earlier than the entry into this Agreement.

8. A duly executed original of a letter from the process agent referred to in clause 13 of the Guarantee Agreement and in clause 8.7 of the pledge

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agreement confirming that it has been appointed by the relevant Obligor and that it has accepted such appointment.

9. A duly executed original of a legal opinion by Morgan Lewis & Bockius LLP, Philadelphia, USA, in respect of the Guarantee Agreement and the Pledge Agreement.

10. Any other document or evidence the Lender may reasonably require.

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SCHEDULE 2

Form of Utilization Request

From: [Borrower]

To [Lender]

Date:

Ladies and Gentlemen,

1. We hereby request you to make the following transfer:

From our account No.: [    ]

To our account No: [    ]

Amount: EURO 48,000,000.00

On (value date): [    ]

Second interest period for Facility A: [1/2/3/6/12] months

2. We hereby confirm all conditions precedent in connection with such transfer are satisfied as of the date of this request.

3. This request is irrevocable.

Best regards

Flaga GmbH

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SCHEDULE 3

Form of Selection Notice

From: [Borrower]

To [Lender]

Date:

Ladies and Gentlemen,

1. We refer to our account No. [    ] with a current interest period ending on [    ].

2. We hereby select that the next following interest period (meaning the interest period immediately following the current interest period) be [    ] month(s) ending on [    ].

3. This selection is irrevocable.

Best regards

Flaga GmbH

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SCHEDULE 4

Mandatory Cost Formulae

1. The Mandatory Cost is an addition to the interest rate to compensate the Lender for the cost of compliance with (a) the new requirements of any national bank (b) in either case, new requirements of any other authority which replaces all or any of its functions, (c) the new requirements of the European Central Bank (in this Clause 1, “new requirements” means requirements introduced and coming into force after the Date of this Agreement).

2. On the first day of each Interest Period (or as soon as possible thereafter) the Lender shall calculate, as a percentage rate, a rate (hereinafter referred to as the “Additional Cost Rate”) in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Lender as a weighted average of the Lender’s Additional Cost Rates and will be expressed as a percentage rate per annum.

3. The Additional Cost Rate for the Lender will be the percentage notified by the Lender as the cost of complying with the minimum reserve requirements of the Austrian National Bank and/or any other authorities referred to in Clause 1 above.

4. Any determination by the Lender pursuant to this schedule 4 in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to the Lender shall, in the absence of manifest error, be conclusive and binding on all parties to this Agreement.

5. The Lender may from time to time, after consultation with the Borrower, determine and notify to the Borrower any amendments which are required to be made to this schedule 4 in order to comply with any change in law, regulation or any requirements from time to time imposed by the Austrian National Bank and/or any other authorities referred to in Clause 1 above, and any such determination shall, in the absence of manifest error, be conclusive and binding on all parties to this Agreement.

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SCHEDULE 5

Definition of Ratios

Equity Ratio as % of total assets means Total Equity divided by Average Adjusted Total Assets.

Return on Assets means Ordinary Income divided by Average Adjusted Total Assets.

Debt Amortization Period means Net Debt divided by EBTDA.

whereas the meaning of capitalized terms shall be as follows:

TOTAL EQUITY means Total Stockholders’ Equity according to quarterly/annual report plus Minority Interests.

AVERAGE ADJUSTED TOTAL ASSETS means the sum of Total Assets according to quarterly/annual report for each of the past four (4) financial quarters divided by four (4).

ORDINARY INCOME means operating income according to quarterly/annual reports.

EBTDA means Ordinary Income plus Depreciation and Amortization minus Interest Expense.

NET DEBT means Current Maturities of Long Term Debt plus Bank Loans plus Long Term Debt (altogether “INTEREST-BEARING LIABILITIES”) minus Cash and cash equivalents minus Short-term investments.

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EX-10.8

Exhibit 10.8

Flaga GmbH

Flaga Straße 1

2100 Leobendorf

Austria

Raiffeisen Zentralbank Österreich

Aktiengesellschaft

Am Stadtpark 9

1030 Vienna

Austria Bratislava, 26 July 2006

Re: Term Loan Offer

Dear Sirs,

We, Flaga GmbH, an Austrian company registered under FN 185471 b in the companies book (Firmenbuch) of the Landesgericht Korneuburg, with its seat at Leobendorf and its business address at Flaga StraBe 1, 2100 Leobendorf, herewith offer Raiffeisen Zentralbank Österreich Aktiengesellschaft to enter with us into the following term loan agreement (for the sake of clarification it is hereby stated that up to now such term loan agreement has not been entered into in whatever form):

Quote

Term Loan Agreement

entered into by and between

Flaga GmbH, Flaga StraBe 1, 2100 Leobendorf, Austria (attention: Managing Director (Josef F. Weinzierl); email: weinzierl@flaqa.at) (the “Borrower”),

and

Raiffeisen Zentralbank Osterreich Aktiengesellschaft, Am Stadtpark 9, 1030 Vienna, Austria (attention: Brigitte Schuster; email: brigitte.schuster@rzb.at) (the “Lender”).

Loan Offer page 1

1. LOAN

1.1 Subject to the terms of this term loan agreement (“this Agreement”), the Lender makes available to the Borrower a non-revolving term loan (the “Loan”) in the aggregate amount of EURO 48,000,000.00 (forty-eight million) consisting of:

(i) Facility A (“Facility A”), which is a loan in the amount of EUR 38,895,000 (“Facility A Loan”), and

(ii) Facility B (“Facility B”), which is a loan in the amount of EUR 9,105.000 (“Facility B Loan”) fully refinanced by Oesterreichische Kontrollbank Aktiengesellschaft (“OeKB”), consisting of Tranche I in the amount of EUR 2,731,500 (“Tranche I”) and Tranche II in the amount of EUR 6,373,500 (“Tranche II”).

2. PURPOSE

2.1 The Borrower shall apply all amounts borrowed under Facility A in paying debts towards the Lender as presently shown on the Borrower’s account no. 1-00.640.763 with the Lender.

2.2 The Borrower shall apply all amounts borrowed under Facility B in re-financing its indirect acquisition of and continued investment in shares in the following companies through the Borrower’s ownership interest in Zentraleuropa LPG Holding GmbH (an Austrian joint venture holding company):

(i) CESKY PLYN K.S., Czech Republic;

(ii) PROGAS S.R.O., Slovakia;

(iii) PROGAS EUROGAZ SP.Z.O.O., Poland

(iv) EUROGAZ S.R.L., Romania;

(v) PROGAS S.A.; Romania;

(vi) THERMOFARM KFT, Hungary.

2.3 Except for its undertakings in clause 4.2, the Lender is not bound to monitor or verify the application of any amount borrowed under this Agreement.

3. CONDITIONS OF UTILIZATION

3.1 The Borrower may not deliver a utilization request for the drawing of the Loan unless the following conditions precedent have been fulfilled:

(i) This Agreement has been duly executed and come into full force and effect; and

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(ii) the guarantee agreement referred to in clause 11.1(i) (the “Guarantee Agreement”) and the share pledge agreement referred to in clause 11.1(ii) (the Pledge Agreement”) have been duly signed and come into full force and effect; and

(iii) the security rights and interest of the Lender under the Guarantee Agreement and the Pledge Agreement (collectively the “Security Agreements”) have been created and perfected in a valid, binding and enforceable manner; and

(iv) the representations and warranties set forth in clause 9.1 are true and correct; and

(v) no event or circumstance as specified in clause 12.1 (a “Default”), which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an event of default as defined in clause 12.1 (an “Event of Default”), has occurred or threatens to occur; and

(vi) the Lender has received the documents and other evidence listed in schedule 1, and it has found such documents in form and substance acceptable and satisfactory to it; and

(vii) an agreement between the Lender and OeKB for the refinancing of utilizations under Facility B (the “OeKB Refinancing Agreement”) has been duly executed and come into full force and effect; and

(viii) the Lender has received from OeKB all funds under the OeKB Refinancing Agreement; and

(ix) the commitment by OeKB no. 23.765 dated 8 June 2006 to guarantee bills of exchange by “aval” in the amount of EUR 9,105,000 (the “OeKB Commitment”; this Agreement, the Security Agreements, and the OeKB Commitment are hereinafter collectively referred to as the “Finance Documents”) has been duly executed and come into full force and effect; and

(x) the Lender has received two (2) bills of exchange issued by the Lender, drawn on and accepted by the Borrower, and guaranteed by OeKB pursuant to the OeKB Commitment, one in the amount of EUR 2,731,500 due on 31 March 2008, and the other in the amount of EUR 6,373,500. due on 31 August 2011; and

(xi) the Lender has received evidence that the agreements regarding the acquisition of shares as referred to in clause 2.2 have been duly executed and come into full force and effect, and that the acquisition price in an aggregate amount of at least EUR 9,105,000 has been paid there under by the Borrower.

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4. UTILIZATION, DISBURSEMENT

4.1 The Borrower may utilize the Loan in EURO by delivery to the Lender of a duly completed utilization request in the form of schedule 2 to be received by the Lender no later than 11 a.m. (Vienna time) on the day falling three (3) Business Days (as defined in the second paragraph of this clause 4.1) before the proposed disbursement date. Only one (1) utilization request may be delivered under this Agreement, the proposed Loan amount has to be EURO 48,000,000.00 (forty-eight million), and the proposed disbursement date must not be later than 31 July 2006. The utilization request shall be irrevocable.

Under this Agreement, a Business Day means a day (other than a Saturday or Sunday) on which banks are open for general business in Vienna/Austria, and which is (in relation to any date for payment or purchase of EURO) a TARGET Day (“TARGET” meaning Trans-European Automated Real-time Gross Settlement Express Transfer payment system).

4.2 Subject to the terms of this Agreement, the Lender shall disburse to the Borrower the Loan amount on the disbursement date as proposed by the Borrower in its utilization request by transfer to the account no. 1-00.640.763 held by the Borrower with the Lender.

5. REPAYMENT, PREPAYMENT

5.1 The Borrower shall repay the outstanding Loan as follows:

(i) The Facility A Loan shall be repaid pursuant to the following repayment schedule:

on (each a “Repayment Date”) an amount of (each a “Repayment Amount”)

31 March 2007	EURO	3,000,000.00
30 September 2007	EURO	3,000,000.00
31 March 2008	EURO	268,500.00
30 September 2008	EURO	3,000,000.00
31 March 2009	EURO	3,000,000.00
30 September 2009	EURO	3,000,000.00
31 March 2010	EURO	3,000,000.00
30 September 2010	EURO	3,000,000.00
31 March 2011	EURO	3,000,000.00
30 September 2011	EURO	14,626,500.00

(ii) As regards the Facility B Loan, Tranche I shall be repaid in one installment on 31 March 2008, and Tranche II shall be repaid in one installment on 31 August 2011 (each a “Repayment Date”).

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5.2 In addition to the repayments set forth in clause 5.1 (each a “Repayment”), the Borrower may prepay without penalty (other than Break Costs, if applicable pursuant to clause 7.4) the whole or any part of the outstanding Facility A Loan, provided that

(i) such prepayment (the “Prepayment”) can only be made on a Repayment Date after 30 September 2009; and

(ii) the Prepayment amount is EURO 5,000,000.00 (five million), a multiple thereof or the entire outstanding Loan; and

(iii) the Prepayment has been notified by the Borrower to the Lender no later than ten (10) Business Days before the Repayment Date on which it is made; and

(iv) the Prepayment is financed by and made from funds freely available to the Borrower, which it has received in form of equity contributions or intercompany loans from any of its direct or indirect shareholders or affiliates.

Each Prepayment shall be fully applied in reverse chronological order towards the Repayments as set forth in clause 5.1 (i).

5.3 In addition to the repayment dates set out in clause 5.1 (i) the Borrower may prepay without penalty the whole or any part of the outstanding Facility B Loan subject to the following:

(i) the Borrower shall – according to the terms of the OeKB Refinancing Agreement – give a month’s prior notice; and

(ii) the Borrower shall reimburse the Lender the OeKB Breakage Costs, if any. For the purpose of this clause, “OeKB Breakage Costs” means the cost demanded by OeKB from the Lender in relation to the refinancing of the Facility B Loan as a result of any such prepayment made by the Borrower under this Agreement including in particular costs and losses in connection with a re-arrangement of and amendment to funding agreements between the Lender and OeKB.

(iii) Each Prepayment shall be fully applied towards the Repayments in the order determined by OeKB in its discretion.

5.4. The Borrower may not re-borrow any amount repaid or prepaid under this Agreement.

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6. INTEREST

6.1 As regards Facility A, each interest period shall be a period of one (1), two (2), three (3), six (6) or twelve (12) months as selected by the Borrower, provided that

(i) the first interest period shall commence on (and include) the day on which the Loan amount is disbursed, and it shall end on (and include) the last day of the calendar month in which the Loan amount is disbursed; and

(ii) each Repayment Date has to be the last day of an interest period; and

(iii) the last interest period shall end on 30 September 2011.

For each interest period, the Borrower shall provide the Lender with a duly completed selection notice in the form of schedule 3 to be received by the Lender no later than 11:00 a.m. (Vienna time) on the day falling three (3) Business Days before the first day of such interest period, failing which the respective interest period shall be one (1) month.

6.2 As regards Facility B, each calendar quarter shall be an interest period, provided that

(i) the first interest period shall commence on (and include) the day on which the Loan amount is disbursed, and it shall end on (and include) the last day of the calendar quarter in which the Loan amount is disbursed; and

(ii) the last interest period for Tranche I shall end on 31 March 2008; and

(iii) the last interest period for Tranche II shall end on 31 August 2011.

6.3 The rate of interest for each interest period shall be:

(i) on the outstanding Facility A portion of the Loan the percentage rate per annum which is the aggregate of:

(a) The applicable EURIBOR (as defined in clause 6.4); and

(b) the applicable Margin (as defined in clause 6.5); and

(c) the applicable Mandatory Cost, if any, being the percentage rate per annum calculated by the Lender in accordance with schedule 4.

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(ii) on the outstanding Facility B portion of the Loan the percentage rate per annum which is the aggregate of:

(a) The OeKB Floating Export Finance Rate (as defined below) in respect of Tranche I, or the OeKB Fixed Export Finance Rate (as defined below) in respect of Tranche II; and

(b) the applicable Margin (as defined in clause 6.5); and

(c) the applicable Mandatory Cost, if any, being the percentage rate per annum calculated by the Lender in accordance with schedule 4.

“OeKB Floating Export Finance Rate” means the interest rate designated by OeKB as valid and applicable floating interest rate for the relevant, specific calendar quarter and appearing on OeKB’s internet homepage under www.oekb.at, or such other page as OeKB may specify from time to time, minus fifty (50) basis points per annum.

“OeKB Fixed Export Finance Rate” means the interest rate designated by OeKB as valid and applicable fixed interest rate for a refinancing granted during the relevant, specific calendar quarter and applicable for the term of such refinancing and appearing on OeKB’s internet homepage under www.oekb.at, or such other page as OeKB may specify from time to time, minus fifty (50) basis points per annum, which rate is, for the avoidance of doubt, 2.50% p.a.

6.4 “EURIBOR” means:

(i) the rate per annum (rounded up to three decimal places) for deposits in EURO for a term comparable to the relevant interest period which appears on the Reuters page “EURIBOR 01” (or any successor to such page) published or reported by REUTERS or such other electronic information service as selected by the Lender; or

(ii) if no such rate is then available, the rate which is determined by the Lender to be the arithmetic mean (rounded up to three decimal places) of the rates per annum for such deposits in EURO offered by three major banks on the European interbank market selected by the Lender, at or about 11 a.m. (Vienna time) on the second TARGET Day before the commencement of the respective interest period.

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6.5 The applicable Margin depends on certain financial ratios of UGI Corporation (on a consolidated basis) as defined in schedule 5 (individually a “Ratio” and collectively the “Ratios”) as follows:

Scenario	Financial Ratios of UGI Corporation *)	Applicable Margin
1)	RoA >= 12.0 DAP <= 2.5 ER >= 33.0	0.52	%
2)	12.0 > RoA >= 9.25 2.5 < DAP <= 4.0 33.0 > ER >= 23.0	0.67	%
3)	9.25 > RoA >= 7.5 4.0 < DAP <= 5.5 23.0 > ER >= 15.0	0.95	%
4)	RoA < 7.5 DAP > 5.5 ER < 15.0	1.45	%

*) “RoA” means Return on Assets (in %), “DAP” means Debt Amortization Period (in years), and “ER” means Equity Ratio as %.

The Ratios shall be calculated by the Lender in accordance with the terms set forth in schedule 5 on the basis of the consolidated financial statements of UGI Corporation to be provided pursuant to clause 10.1(ii), beginning with the consolidated quarterly financial statements of UGI Corporation for the first calendar quarter of 2006. UGI Corporation may, at its discretion, provide its calculation of such Ratios together with the submission of the financial statements that are required to be submitted pursuant to clause 10.1(ii). For the sake of clarification, however, it is hereby stated that only the calculation by the Lender is relevant for the purpose of this Agreement.

On the basis of such calculation made by it, the Lender shall fix the Margin on the basis of the weakest Ratio. To give an example: Even if only one Ratio falls within scenario 3 as set out in the above chart, the applicable Margin shall be 0,95%.

The Margin so fixed shall apply to all interest periods following the interest period in which the Lender has duly received the relevant consolidated financial statements of UGI Corporation until (and including) the interest period in which the Lender duly receives the next relevant consolidated financial statements of UGI Corporation in accordance with clause 10.1(ii). In the event that the Lender does not duly receive consolidated financial statements of UGI Corporation in accordance with clause 10.1(ii) for any reason whatsoever, a Margin of 1,45% shall apply to all interest periods following the interest period in which the Lender failed to duly receive the relevant consolidated financial statements of UGI Corporation until (and including) the interest period in which the Lender actually receives such consolidated financial statements of UGI Corporation.

For the sake of clarification it is hereby stated that no reduction of the applicable Margin will preclude a later increase of the applicable Margin in accordance with the terms of this clause, and vice versa.

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6.6 Interest shall be calculated for each interest period from the outstanding Loan amount (not taking into account any Loan amounts repaid or prepaid on the last day of such interest period) on the basis of actual number of days elapsed in a year of 360 days.

6.7 Interest shall be paid by the Borrower to the Lender for each portion of the Loan and associated interest period on the last day of the same interest period.

7. FEE, COSTS AND EXPENSES, INDEMNITIES

7.1 Upon the acceptance by the Lender of the present offer to enter into this Agreement the Borrower shall pay the Lender an up-front fee in the amount of EURO 95,000.00 (ninety-five thousand) flat.

7.2 The Borrower shall bear and pay all costs of the legal opinions mentioned in schedule 1. Furthermore, the Borrower shall bear, and it shall pay the Lender within seven (7) Business Days of demand by the Lender, all reasonable out of pocket costs and expenses of whatever nature incurred by the Lender, after the acceptance by the Lender of the present offer to enter into this Agreement, in connection with the implementation of this Agreement including, without limitation, costs and expenses arising in connection with the preservation, protection or enforcement of the Lender’s rights under this Agreement. Moreover, the Borrower shall bear, and it shall pay the Lender within seven (7) Business Days of demand by the Lender, any taxes or duties of whatever nature incurred by the Lender in connection with any of the Finance Documents including, without limitation, taxes or duties arising under the Austrian Duties Act (österreichisches Gebührengesetz).

7.3 The Borrower shall, within seven (7) days of demand by the Lender, reimburse the Lender for any incremental costs incurred by the Lender, after the acceptance by the Lender of the present offer to enter into this Agreement, in connection with the making or maintaining of, or the commitment to make, the Loan which result from the introduction of, or any change in, any applicable law or other legal regulation, or any change in the interpretation or application thereof by any governmental or regulatory authority charged with the administration thereof. The Borrower shall not be required to reimburse the Lender for increased costs attributable to any change in the rate of tax on the general income of Lender, or amounts the Lender has been compensated for pursuant to clause 8.2.

If the Borrower is required by the Lender to pay any incremental costs under the first paragraph of this clause 7.3, the Borrower may whilst the relevant circumstances continue, without prejudice to its obligations under the first paragraph of this clause 7.3, prepay the entire outstanding Loan on any Repayment Date without prepayment penalty (other than Break Costs, if applicable pursuant to clause 7.4), provided that such Prepayment has been

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notified by the Borrower to the Lender no later than ten (10) Business Days before the Repayment Date on which it is made.

7.4 The Borrower shall, within seven (7) Business Days of demand by the Lender, pay the Lender its Break Costs (as defined in the second paragraph of this clause 7.4) attributable to all or any part of a Loan being paid to the Lender on a day other than a Repayment Date for that Loan, or attributable to all or any part of an Unpaid Sum (meaning any sum due but unpaid to the Lender under or in connection with the Finance Documents) being paid to the Lender on a day other than the due date of such Unpaid Sum.

“Break Costs” means the amount (if any) by which:

(i) the interest which the Lender should have received for the period from the date of receipt of all or any part of a Loan or Unpaid Sum to the last day of the then current Interest Period in respect of that Loan or Unpaid Sum, had the Loan amount or Unpaid Sum received been paid on the last day of that Interest Period;

exceeds:

(ii) the amount which the Lender would be able to obtain by placing an amount equal to the Loan amount or Unpaid Sum received by it on deposit with a leading bank in the European interbank market for a period starting on the Business Day following receipt or recovery and ending on the last day of the then current Interest Period.

7.5 Notwithstanding, and without prejudice to, any other rights and claims of the Lender, the Borrower shall, within seven (7) Business Days of demand by the Lender, indemnify the Lender against any cost, loss or liability reasonably incurred by the Lender as a result of:

(i) the occurrence of any Event of Default; and/or

(ii) a failure by the Borrower to comply with any of its obligations under or in connection with this Agreement; and/or

(iii) funding, or making arrangements to fund, any Loan requested by the Borrower but not made by reason of the operation of any provisions of this Agreement (other than by reason of default or negligence by that Lender alone); and/or

(iv) the Loan (or part of the Loan) not being prepaid in accordance with a notice of Prepayment given by the Borrower.

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7.6 The Borrower shall promptly, by latest within seven (7) Business Days of demand by the Lender, pay the Lender the amount of all costs and expenses payable by the Lender to OeKB in connection with the OeKB Refinancing Agreement and/or the OeKB Commitment.

7.7 The Borrower shall pay when due all amounts payable by it to OeKB in connection with the OeKB Commitment. As at the date of the present offer to enter into this Agreement, the Borrower has to pay OeKB for each calendar quarter in advance a fee for the OeKB Commitment (Wechselbürgschaftsentgelt) at a rate of 0.2% (zero point two percent) per annum calculated on the outstanding amount under Facility B at the beginning of each calendar quarter. The first payment of the fee will be calculated from the date of the drawdown of the Facility B Loan until the end of the calendar quarter in which the drawdown was made.

8. PAYMENTS

8.1 All payments due from the Borrower under this Agreement shall be

(i) debited by the Lender with value of the relevant due date to the account no. 1-00.640.763 held by the Borrower with the Lender, and

(ii) made by the Borrower no later than 11:00 a.m. (Vienna time) on the relevant due date by transfer to the same account.

Payment shall be made in EURO for value on the due date, and it shall be made in full without any withholding or other deduction of any kind or nature (whether in respect of set-off, counterclaim, taxes, duties, charges or otherwise whatsoever).

8.2 If the Borrower is required by law or otherwise to make any withholding or other deduction whatsoever in respect of any amount due under this Agreement, and the Borrower makes such deduction, the Borrower shall increase the sum payable to the Lender in respect of which such deduction was made to the extent necessary to ensure that, after making such deduction, the Lender receives and retains (free from any liability in respect of any such deduction) a net sum equal to the sum which it would have received and so retained had no such deduction been made by the Borrower.

8.3 If, as a result of a payment made by the Borrower under clause 8.2, the Lender has received or been granted a credit against or remission for or deduction or relief from or in respect of any tax payable by it, which is both identifiable and quantifiable by the Lender without requiring it to expend a material amount of time or incur a material cost in so identifying or quantifying (any of the foregoing, to the extent so identifiable and quantifiable, a “Saving”), the Lender shall, to the extent it can do so without prejudice to the retention of the relevant Saving and subject to the Borrower’s obligation to repay promptly on demand by the Lender

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the amount to the Lender if the relevant Saving is subsequently disallowed or cancelled, reimburse the Borrower promptly after receipt of such Saving by the Lender with such amount.

8.4 Any sum due to be paid under this Agreement on a day which is not a Business Day shall be paid on the last preceding Business Day.

8.5 If the Borrower fails to pay any amount payable by it under this Agreement on its due date, the Borrower shall pay default interest on such overdue amount from (and including) the due date up to (and including) the date of actual payment at a rate of three (3) per cent per annum. Default interest shall be paid in addition to interest payable under clause 6. Default interest shall be immediately payable by the Borrower on demand by the Lender. Default interest (if unpaid) arising on an overdue amount will be compounded with such overdue amount at the end of each interest period applicable to that overdue amount but will remain immediately due and payable. Default interest shall be calculated on the basis of the actual number of days elapsed in a year of 360 days.

9. REPRESENTATIONS AND WARRANTIES

9.1 The Borrower represents and warrants to the Lender that:

(i) The Borrower is a company duly established and validly existing under the laws of Austria having its corporate seat and head office in Austria;

(ii) The Borrower has the corporate power to own its assets and to carry on its business as it is being conducted;

(iii) the Borrower has the corporate power to enter into this Agreement and to perform its obligations hereunder, and all necessary action to authorize its entry into this Agreement and its performance hereof has been duly taken;

(iv) each of the Finance Documents is a legal, valid and binding agreement enforceable in accordance with its terms, and the security rights and interest of the Lender under the Security Agreements are legal, valid and binding security rights and interest enforceable in accordance with their terms;

(v) the Borrower has taken no corporate action, and no other steps or legal proceedings have been started or, to the best of the Borrower’s knowledge, threatened against it, for its winding-up, dissolution, administration or re-organization or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of it or of all or any material part of its assets or revenues;

(vi) no Default has occurred or will occur as a result of making the Loan, and the Borrower is not in breach or in default under any agreement or other

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instrument to which it is a party or which is binding on it (or any of its assets) to an extent or in a manner which would be reasonably likely to have a material adverse effect on it;

(vii) no litigation, arbitration or administrative proceeding of or before any court, arbitral body or agency has been started or, to the best of the Borrower’s knowledge, threatened against the Borrower which, if adversely determined, would be reasonably likely to have a material adverse effect on the Borrower;

(viii) to the best of the Borrower’s knowledge, all information supplied by the Borrower or any of its direct or indirect shareholders to the Lender in connection with this Agreement is true, complete and accurate in all material respects;

(ix) the Borrower’s entering into this Agreement and its exercise of its rights and performance of its obligations hereunder do not and will not conflict with any material agreement or material obligation to which the Borrower is a party or which is binding upon it or any of its assets, or conflict with its constitutive documents and internal rules and regulations;

(x) the Borrower is not and will not be insolvent in terms of the Austrian Insolvency Codes (Ausgleichs- und Konkursordnung);

(xi) the Borrower is and will remain a company fully owned and controlled, either directly or indirectly, by UGI Corporation, 460 North Gulph Road, King of Prussia, PA 19406, USA (“UGI Corporation”); and

(xii) the payment obligations of the Borrower under this Agreement rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors.

9.2 The representations and warranties set out in clause 9.1 are deemed to be repeated by the Borrower (by reference to the facts and circumstances then existing) on each day from the entry into this Agreement to and including the day on which the Finance Documents are terminated and all rights and claims of the Lender under or in connection with the Finance Documents are duly fulfilled.

10. COVENANTS AND UNDERTAKINGS

10.1 The Borrower covenants and undertakes, from the entry into this Agreement to and including the day on which the Finance Documents are terminated and all rights and claims of the Lender under or in connection with the Finance Documents are duly fulfilled, that:

(i) the Borrower shall provide to the Lender such information in relation to its business, operations and financial position as the Lender may reasonably require;

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(ii) the Borrower shall provide, or cause UGI Corporation to provide, the Lender with copies of the audited consolidated financial statements of UGI Corporation within ninety (90) days after the end of the period for which they have been prepared, and copies of the unaudited quarterly consolidated financial statements of UGI Corporation within forty-five (45) days after the end of the period for which they have been prepared;

(iii) the Borrower shall notify the Lender of the occurrence of any Default and/or Event of Default;

(iv) the Borrower shall take out and maintain, or ensure that any of its affiliates takes out and maintains, insurance cover over the Borrower’s assets and other appropriate insurance cover including, but not limited to insurance cover for interruption of business and general liability, of a type and in an amount which is consistent with good business practice;

(v) the Borrower shall ensure that its obligations under this Agreement do and will always rank at least pari passu with its other secured and unsecured obligations, other than obligations to creditors having preference as a matter of mandatory law and other than obligations which already exist and have preference when this Agreement is concluded; as regards the latter obligations, the Borrower shall use reasonable best efforts to provide promptly that such obligations having a material adverse impact on its ability to comply with the terms of this Agreement will have no preference in respect of its obligations under this Agreement;

(vi) the Borrower shall not create or permit to exist any collateral or security interest in favor of one or more third parties on the whole or any part of its present or future property, assets or revenues, without the prior written consent of the Lender which shall not be unreasonably withheld. The provision in the first sentence of this clause 10.1(vi) shall not apply in respect of collateral or security interest created in the ordinary course of business, provided that such collateral or security interest has no material negative impact on the Borrower’s ability to perform under this Agreement;

(vii) the Borrower shall not, without the prior written consent of the Lender which shall not be unreasonably withheld, either in a single transaction or in a series of transactions whether related or not and whether voluntarily or involuntarily, sell, transfer, lease or otherwise dispose of all or a substantial part of its property or assets. The provision in the first sentence of this clause 10.1(vii) shall not apply in respect of dispositions in the ordinary course of business, provided that such dispositions have no negative impact on the Borrower’s ability to perform under this Agreement;

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(viii) other than

(a) intercompany loans in favor of the Borrower’s subsidiaries (including, without limitation, Progas Austria) and the existing loan in the amount of EUR 11,407,482 granted by the Borrower to UGI France, Inc. (now known as UGI Europe, Inc.), and

(b) the Borrower’s undertakings set forth in that certain shareholders’ agreement regarding Zentraleuropa LPG Holding GmbH (as presented by the Borrower to the Lender prior to the entry into this Agreement) so long as the Borrower holds and controls a share of at least 50% in Zentraleuropa LPG Holding GmbH,

the Borrower shall not make any loans or grant any credit or other financing of any kind to or for the benefit of any person or otherwise voluntarily assume any liability, whether actual or contingent, in respect of the obligations of any other person, except within the ordinary course of business, or with the prior written consent of the Lender not to be unreasonably withheld, provided always that such loans, credits, other financings or liabilities have no material negative impact on the Borrower’s ability to perform under this Agreement;

(ix) the Borrower hereby irrevocably grants a right of first refusal for any and all of its present and future lending transactions in favor of the Lender. It is understood that the Borrower shall have the right to solicit offers from other banks in respect of such transactions. However, the Lender shall have the right to enter into any or all of such transactions, and to provide all related services, at competitive market conditions, if among the banks making offers, the Lender’s offer is at least as competitive as the best offer made among the other banks. It is understood that the Borrower shall not accept a Lender’s offer not made at competitive market conditions;

(x) the Borrower shall promptly upon demand by the Lender provide, or cause UGI Corporation to provide, the Lender with any and all documents and other information regarding the Borrower or any of the companies mentioned in clause 2.2(i) to (vi), which OeKB may request, and/or which have to be furnished by the Lender to OeKB, in connection with the OeKB Refinancing Agreement and/or the OeKB Commitment; and

(xi) the Borrower shall promptly inform the Lender about any and all changes regarding the share quota held by it indirectly in any of the companies mentioned in clause 2.2(i) to (vi), or regarding the purpose of its acquiring or holding of a share in any of such companies.

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11. SECURITY

11.1 As security for all present and future rights and claims of the Lender under or in connection with this Agreement the following shall apply:

(i) Under a separate guarantee agreement in form and substance satisfactory to the Lender (the “Guarantee Agreement”), UGI Corporation issues a guarantee in favor of the Lender according to Section 1357 of the Austrian Civil Code (§ 1357 ABGB); and

(ii) under a separate pledge agreement in form and substance satisfactory to the Lender, Eastfield International Holdings, Inc. grants the Lender a first priority pledge over all shares in the Borrower.

12. DEFAULT

12.1 In the event that:

(i) the Borrower defaults in the payment on the due date of any amount due and payable to the Lender under this Agreement and/or under any other present or future agreement for more than five days; or

(ii) the Borrower is in material breach of any of the terms and conditions of this Agreement and/or any other present or future agreement with the Lender (other than those referred to in clause 12.1(i)) and, in the case of a breach that is capable of remedy, such breach is not remedied within thirty days after the occurrence of such breach; or

(iii) any of the representations or warranties of the Borrower under this Agreement, or any of the opinions expressed in the legal opinion mentioned in schedule 1, proves to be or becomes incorrect, or any certificate, statement or notice issued to the Lender in connection with this Agreement proves to be or becomes incorrect in a material respect; or

(iv) a material adverse change in the economic situation of the Borrower occurs or threatens to occur; or

(v) any of the following Ratios (as defined in and calculated according to clause 6.5) is achieved:

(a) the Return on Assets is lower than 6,50% (six point five percent), or

(b) the Debt Amortization Period is equal to or longer than 6,75 (six point seventy five) years, or

(c) the Equity Ratio is lower than 15,00% (fifteen percent);

(each an Event of Default), the Lender shall at any time be entitled to terminate this Agreement (whereupon this Agreement shall be terminated with immediate effect), and/or to declare, in whole or in part, any amount(s) outstanding to it under or in

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connection with this Agreement due and payable (whereupon the respective amounts shall become due and payable with immediate effect).

12.2 If, as a result of any change in GAAP (as defined in the last paragraph of this clause 12.2) after the entry into this Agreement, a change of the scenario set out on the chart under clause 6.5 (the “Scenario”) - either an upward change (for example from Scenario 3 to Scenario 2) or a downward change (for example from Scenario 2 to Scenario 3) shall have occurred or in the opinion of UGI would be likely to occur, which change would not have occurred or would not have been likely to occur had no change in GAAP taken place:

(i) such change of Scenario shall not be considered to constitute an Event of Default or potential Event of Default, and

(ii) in the event of either an upward or downward change of Scenario; the Borrower shall provide the Lender with a detailed calculation based upon (a) GAAP prior to the change and (b) GAAP after the change, with a reasonable explanation for the differences, and

(iii) the parties shall negotiate in good faith an amendment to this Agreement which shall approximate to the extent possible the economic effect of the original Ratios taking into account such change in GAAP.

If the parties do not agree on such amendment within sixty (60) days from the date on which the Borrower first notifies the Lender of such change in GAAP, the Borrower shall have the option of (i) prepaying in full the Loan and all other amounts outstanding under or in connection with this Agreement, or (ii) for purposes of this Agreement, continuing to apply GAAP as in effect prior to such change in GAAP.

“GAAP” means generally accepted accounting principles in the United States of America as in effect at the time of any particular computation or determination or as of the date of the relevant financial statements, as the case may be.

12.3 The Ordinary Income (as defined in Schedule 5) for any period shall be adjusted by the addition of the Ordinary Income of any acquisition made during that period as if such acquisition had occurred on the first day of the period. At the request of the Lender, the Borrower shall provide supporting documents reasonably satisfactory to the Lender relating to the Ordinary Income of the acquisition.

12.4 Should a change of Scenario occur because of a change in the Equity Ratio that results from an acquisition financed with debt,

(i) the Borrower shall have sixty (60) days from the date of the acquisition to cure the cause (or have UGI Corporation cure the cause) of such a change in Scenario, and

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(ii) the Borrower shall immediately provide (or have UGI Corporation provide) reasonable evidence that a cure is possible within the 60 day period, and

(iii) within 30 days of completing an acquisition that would, in its opinion, cause such a change in Scenario, the Borrower shall provide (or have UGI Corporation provide) a reasonable explanation of the acquisition and a detailed calculation of the Equity Ratio as of the date of the acquisition, and,

(iv) upon curing the cause of such a change of Scenario, the Borrower shall provide (or have UGI Corporation provide) a reasonable explanation of the cure and a detailed calculation of the Equity Ratio that reflects the cure.

13. MISCELLANEOUS

13.1 If any of the provisions of this Agreement are or become invalid or unenforceable in any respect, the validity and enforceability of the remaining provisions shall not in any way be affected or impaired.

13.2 Any notice or communication under or in connection with this Agreement shall be in writing and shall be delivered by mail, fax, courier or email to the addresses given in this Agreement or at such other address as the recipient may have notified to the other party in writing.

13.3 The Borrower may not assign, pledge or dispose otherwise of any of its rights or claims under or in connection with this Agreement without the prior written consent of the Lender.

13.4 The Lender may grant participations, and/or assign or transfer any or all of its rights or claims under or in connection with this Agreement, to other financial institutions with the prior written consent of the Borrower only, which consent shall not be unreasonably withheld. Such consent, however, shall not be required for the granting of participations, nor for any assignment or transfer, to OeKB (with respect to Facility B only) or any members of the Raiffeisen Banking Group.

13.5 No failure by the Lender to exercise, nor any delay by the Lender in exercising, any right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise thereof or the exercise of any other right or remedy. The rights and remedies provided herein are cumulative and not exclusive of any rights or remedies provided by law.

13.6 The Borrower hereby irrevocably agrees to the electronic processing of all information and data concerning the Borrower and/or any of its affiliated companies which become known to the Lender in the course of the business

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relationship with the Borrower or any of its affiliated companies, and to the disclosure and forwarding of such information and data (except information and data regarding confidential know-how of the Borrower or any of its affiliates as well as confidential business or financial information explicitly identified by the Borrower in writing as being confidential as required by any law or legal regulation applicable to the Borrower or to any of its affiliates) within the internal organization of the Lender as well as to any domestic or foreign member companies of the Raiffeisen Banking Group and any (potential) parties of syndication or risk participation or security agreements. Prior to releasing any information or data to other parties (including companies of the Raiffeisen Banking Group) provided by the Borrower, the Lender shall enter into a written confidentiality agreement with the recipient of such information or data requiring it to maintain the confidentiality of the information or data, whereby such recipient shall be entitled to electronically process the information or data for internal use.

13.7  All present and future obligations under or in connection with this Agreement have to be fulfilled at the Lender’s premises at Am Stadtpark 9, 1030 Vienna.

13.8  In addition to the terms of this Agreement, the General Terms and Conditions (Version 2001) of the Lender shall apply subsidiarily.

13.9  This Agreement shall be governed by and construed in accordance with the Austrian law.

13.10  Any dispute, controversy or claim arising out of or in connection with this Agreement shall non exclusively be settled by the competent commercial court of Vienna.

UNQUOTE

The present offer shall be irrevocably valid and binding until 31 July 2006. You can accept this offer by debiting our account no. 1-00.640.763 with the up-front fee mentioned in clause 7.1. You are hereby irrevocably authorized to make such debit entry. Upon such debit entry only, the present offer shall be validly accepted irrespective of whether and when we will be informed of your acceptance.

Kind regards

Flaga GmbH

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Schedule 1	List of Condition Precedent Documents
Schedule 2	Form of Utilization Request
Schedule 3	Form of Selection Notice
Schedule 4	Mandatory Cost Formulae
Schedule 5	Definition of Ratios

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SCHEDULE 1

Condition Precedent Documents

1. A duly executed original of each Finance Document.

2. the OeKB Refinancing Agreement

3. A copy of the constitutional documents of the Borrower, the Guarantor and the Pledgor (individually also an “Obligor”).

4. An extract of the commercial (or equivalent) register of each Obligor.

5. A copy of a resolution of the directors, the board of directors or any other relevant board, body or person of each Obligor:

(i) approving the terms of, and the transactions contemplated by, the Finance Documents to which an Obligor is a party and resolving to execute the Finance Documents to which it is a party;

(ii) authorizing a specified person or persons to execute the Finance Documents to which it is a party on its behalf; and

(iii) authorizing a specified person or persons, on its behalf, to sign and/or dispatch all documents, notices and other communication (including, without limitation, any Utilization Request and Selection Notice) to be signed and/or dispatched by it under or in connection with the Finance Documents to which it is a party.

6. A specimen of the signature of each person authorized by the resolution referred to in point 5 (iii) above.

7. A certificate provided by an authorized signatory of the relevant Obligor certifying that each copy document relating to it specified in this schedule 1 is true and correct, complete and in full force and effect as at a date no earlier than the entry into this Agreement.

8. A duly executed original of a letter from the process agent referred to in clause 13 of the Guarantee Agreement and in clause 8.7 of the pledge

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agreement confirming that it has been appointed by the relevant Obligor and that it has accepted such appointment.

9. A duly executed original of a legal opinion by Morgan Lewis & Bockius LLP, Philadelphia, USA, in respect of the Guarantee Agreement and the Pledge Agreement.

10. Any other document or evidence the Lender may reasonably require.

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SCHEDULE 2

Form of Utilization Request

From: [Borrower]

To [Lender]

Date:

Ladies and Gentlemen,

1. We hereby request you to make the following transfer:

From our account No.:            [    ]

To our account No:                            [    ]

Amount:                                    EURO 48,000,000.00

On (value date):                        [    ]

Second interest

period for Facility A:                            [1/2/3/6/12] months

2. We hereby confirm all conditions precedent in connection with such transfer are satisfied as of the date of this request.

3. This request is irrevocable.

Best regards

Flaga GmbH

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SCHEDULE 3

Form of Selection Notice

From: [Borrower]

To [Lender]

Date:

Ladies and Gentlemen,

1. We refer to our account No. [    ] with a current interest period ending on [    ].

2. We hereby select that the next following interest period (meaning the interest period immediately following the current interest period) be [    ] month(s) ending on [    ].

3. This selection is irrevocable.

Best regards

Flaga GmbH

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SCHEDULE 4

Mandatory Cost Formulae

1. The Mandatory Cost is an addition to the interest rate to compensate the Lender for the cost of compliance with (a) the new requirements of any national bank (b) in either case, new requirements of any other authority which replaces all or any of its functions, (c) the new requirements of the European Central Bank (in this Clause 1, “new requirements” means requirements introduced and coming into force after the Date of this Agreement).

2. On the first day of each Interest Period (or as soon as possible thereafter) the Lender shall calculate, as a percentage rate, a rate (hereinafter referred to as the “Additional Cost Rate”) in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Lender as a weighted average of the Lender’s Additional Cost Rates and will be expressed as a percentage rate per annum.

3. The Additional Cost Rate for the Lender will be the percentage notified by the Lender as the cost of complying with the minimum reserve requirements of the Austrian National Bank and/or any other authorities referred to in Clause 1 above.

4. Any determination by the Lender pursuant to this schedule 4 in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to the Lender shall, in the absence of manifest error, be conclusive and binding on all parties to this Agreement.

5. The Lender may from time to time, after consultation with the Borrower, determine and notify to the Borrower any amendments which are required to be made to this schedule 4 in order to comply with any change in law, regulation or any requirements from time to time imposed by the Austrian National Bank and/or any other authorities referred to in Clause 1 above, and any such determination shall, in the absence of manifest error, be conclusive and binding on all parties to this Agreement.

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SCHEDULE 5

Definition of Ratios

Equity Ratio as % of total assets means Total Equity divided by Average Adjusted Total Assets.

Return on Assets means Ordinary Income divided by Average Adjusted Total Assets.

Debt Amortization Period means Net Debt divided by EBTDA.

whereas the meaning of capitalized terms shall be as follows:

TOTAL EQUITY means Total Stockholders’ Equity according to quarterly/annual report plus Minority Interests.

AVERAGE ADJUSTED TOTAL ASSETS means the sum of Total Assets according to quarterly/annual report for each of the past four (4) financial quarters divided by four (4).

ORDINARY INCOME means operating income according to quarterly/annual reports.

EBTDA means Ordinary Income plus Depreciation and Amortization minus Interest Expense.

NET DEBT means Current Maturities of Long Term Debt plus Bank Loans plus Long Term Debt (altogether “INTEREST-BEARING LIABILITIES”) minus Cash and cash equivalents minus Short-term investments.

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EX-10.9

Exhibit 10.9

Flaga GmbH

Flaga Straße 1

2100 Leobendorf

Austria

Raiffeisen Zentralbank Österreich

Aktiengesellschaft

Am Stadtpark 9

1030 Vienna

Austria Bratislava, 26 July 2006

Re: Working Capital Facility Offer

Dear Sirs,

We, Flaga GmbH, an Austrian company registered under FN 185471 b in the companies book (Firmenbuch) of the Landesgericht Korneuburg, with its seat at Leobendorf and its business address at Flaga Straße 1, 2100 Leobendorf, herewith offer Raiffeisen Zentralbank Österreich Aktiengesellschaft to enter with us into the following facility agreement (for the sake of clarification it is hereby stated that up to now such loan agreement has not been entered into in whatever form):

Quote

Facility Agreement

entered into by and between

Flaga GmbH, Flaga Straße 1, 2100 Leobendorf, Austria (attention: Managing Director (Josef F. Weinzierl); email: weinzierl@flaga.at) (the “Borrower”),

and

Raiffeisen Zentralbank Österreich Aktiengesellschaft, Am Stadtpark 9, 1030 Vienna, Austria (attention: Peter Straubinger; email: peter.straubinger@rzb.at) (the “Lender”).

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1. FACILITY

1.1 Subject to the terms of this working capital facility agreement (the “Agreement”), the Lender makes available to the Borrower a revolving working capital facility (the “Facility”) in the aggregate maximum amount of EURO 8,000,000.00 (eight million) (the “Maximum Facility Amount”).

1.2 The Facility can be utilized as:

(i) overdraft facility (the “Overdraft Facility”) in EURO available on the account no. 1-00.640.763 held by the Borrower with the Lender (the “Overdraft Account”); and/or

(ii) guarantee facility (the “Guarantee Facility”) for the issuance of payment or performance guarantees in EURO or foreign currency by the Lender upon the request and for the account of the Borrower;

provided that the aggregate amount outstanding under the Overdraft Facility and the Guarantee Facility shall never exceed the Maximum Facility Amount.

2. PURPOSE

2.1 The Borrower shall use all amounts borrowed under this Agreement for its general financing requirements and those of its subsidiary, Progas Austria.

2.2 Except for its undertakings in clauses 4.2, 4.4 and 8.1(i), the Lender is not bound to monitor or verify the application of any amount borrowed under this Agreement.

3. CONDITIONS OF UTILIZATION

3.1 The Borrower may not utilize the Facility unless the following conditions precedent have been fulfilled:

(i) This Agreement has been duly executed and come into full force and effect; and

(ii) the guarantee agreement referred to in clause 11.1(i) (the “Guarantee Agreement”) has been duly signed and come into full force and effect; and

(iii) the rights and interest of the Lender under the Guarantee Agreement (together with this Agreement the “Finance Documents”) have been created in a valid, binding and enforceable manner; and

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(iv) the representations and warranties set forth in clause 9.1 are true and correct; and

(v) no event or circumstance as specified in clause 12.1 (a “Default”), which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an event of default as defined in clause 12.1 (an “Event of Default”), has occurred or threatens to occur; and

(vi) the Lender has received the documents and other evidence listed in schedule 1, and it has found such documents in form and substance acceptable and satisfactory to it.

4. UTILIZATION

Overdraft Facility

4.1 The Borrower may utilize the Overdraft Facility in EURO by giving the Lender payment orders or debit instructions in respect of the Overdraft Account, provided always that the amount of the respective payment order or debit instruction, together with all amounts then outstanding under the Overdraft Facility and the Guarantee Facility, shall not exceed the Maximum Facility Amount. Each payment order and debit instruction shall be irrevocable.

4.2 Subject to the terms of this Agreement, the Lender shall comply with the payment orders and debit instructions referred to in clause 4.1 and debit the Overdraft Account accordingly.

Guarantee Facility

4.3 The Borrower may utilize the Guarantee Facility by giving the Lender instructions to issue payment or performance guarantees (each a “Guarantee”), provided always that:

(i) each instruction shall (a) specify the beneficiary, the amount, the date of issue and the date of expiry of the requested Guarantee, and (b) have the wording of the requested Guarantee attached to it; and

(ii) the term of the requested Guarantee is not more than 24 months from issuing of the Guarantee; and

(iii) the wording of the requested Guarantee is acceptable to the Lender in form and substance; and

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(iv) the amount of the requested Guarantee, together with all amounts then outstanding under the Overdraft Facility and the Guarantee Facility, shall not exceed the Maximum Facility Amount.

Each instruction to issue a Guarantee shall be irrevocable.

4.4. Subject to the terms of this Agreement, the Lender shall issue the requested Guarantees.

4.5. Should Guarantees issued by the Lender according to this Agreement under the Guarantee Facility be drawn for there exists no foreign currency account of the Borrower with the Lender, the Lender shall inform the Borrower and shall debit the amounts drawn to the current Overdraft Account unless the Borrower provides the amounts in the relevant foreign currency within 2 Business Days. The Lender will convert amounts paid under a Guarantee into the currency on the basis of the daily exchange rate as of the date of the instruction to issue the Guarantee. Insofar as there is no cover for these amounts in the Overdraft Account, the Borrower shall immediately pay these amounts to the Lender for credit and deposit in the Overdraft Account.

5. REPAYMENT

5.1 Overdraft Facility

The Borrower shall repay all amounts outstanding under the Overdraft Facility at the latest 364 days after the acceptance of this offer (the “Final Maturity Date”).

5.2 Guarantee Facility

In case a payment demand is made by the beneficiary under a Guarantee, the Lender will send a notice to the Borrower informing the Borrower of such payment demand, and specifying (a) the amount to be reimbursed by the Borrower, (b) the date on which such reimbursement is to be made, and (c) the account to which the reimbursement amount is to be transferred. The Borrower shall make each reimbursement in accordance with the respective notice of the Lender.

5.3. From the date a payment demand is made by a beneficiary under a Guarantee until the date the Lender has been fully reimbursed by the Borrower in accordance with clause 5.2 the Lender shall not be obliged to issue any further Guarantee.

5.4. The Borrower shall pay the Lender all amounts outstanding under the Guarantee Facility at the latest on the day falling 364 days after the acceptance of this offer (the “Expiry Date”).

5.5. In case that a Guarantee issued extends beyond the Expiry Date for whatever reason (e.g. an extend or pay request is made by the beneficiary), the Borrower shall either provide the Lender with a cash deposit in an amount equal to the aggregate commitment of Lender under that Guarantee then outstanding as

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security for all reimbursement claims of the Lender against the Borrower that may arise in connection with these Guarantees or return the Guarantee together with a waiver by the beneficiary of all rights under the Guarantee.

6. INTEREST

Overdraft Facility

6.1 The rate of interest on the amounts outstanding under the Overdraft Facility shall be the percentage rate per annum which is the aggregate of:

(i) The applicable EONIA (as defined in clause 6.2); and

(ii) a margin of 50.00 (fifty point zero) basis points; and

(iii) the applicable Mandatory Cost, if any, being the percentage rate per annum calculated by the Lender in accordance with schedule 3.

6.2 “EONIA” (EURO OVERNIGHT INDEX AVERAGE) means

(i) the rate for overnight deposits in EURO calculated by the European Central Bank and appearing on the Reuters EONIA page (or the relevant page of the Telerate or Bloomberg system, or any successor to any of the aforementioned pages) at about 7 p.m. Central European time, or

(ii) if no such page is then available, the rate being the arithmetic mean (rounded up to three decimal places) of rates quoted to the Lender by three reference banks taking part in the daily EURIBOR-fixing procedure (to be selected by the Lender at its sole discretion) for EURO overnight moneys, or

(iii) if no such quotes are then available, the rate equal to the actual costs of funding incurred by the Lender.

EONIA will be determined by the Lender on a daily basis.

6.3. Interest under the Overdraft Facility shall be calculated for the amount outstanding from time to time on the Overdraft Account on the basis of the actual number of days elapsed in a year of 360 days. Such calculation shall be made by the Lender on a daily basis.

6.4 Interest on the amounts outstanding under Overdraft Facility shall be paid by the Borrower to the Lender on the last Business Day of each quarter of a calendar year.

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7. FEES, COSTS AND EXPENSES, INDEMNITIES

7.1 The Borrower shall pay the Lender a commitment fee of 12.50 (twelve point fifty) basis points per annum on the balance from time to time between the Maximum Facility Amount on the one hand and the aggregate outstanding amounts under the Overdraft Facility plus the aggregate amounts of all issued Guarantees under the Guarantee Facility, on the other hand. The commitment fee shall be calculated for each calendar quarter on the basis of the actual number of days elapsed in a year of 360 days, and it shall be paid in arrears on the last Business Day of the calendar quarter for which it is calculated.

7.2 For each Guarantee issued under the Guarantee Facility, the Borrower shall pay the Lender:

(i) on the relevant issuance date an issuance fee in the amount of EURO 53.00; and

(ii) a guarantee fee of 25.00 (twenty-five point zero) basis points per annum on the maximum Guarantee amount. The guarantee fee shall be calculated during the validity of the Guarantee, and it shall be payable in respect of a certain Guarantee for each calendar quarter in advance on the relevant issuance date and, thereafter, on the last Business Day before the calendar quarter for which it is payable.

7.3 The Borrower shall bear and pay all costs of the legal opinions mentioned in schedule 1. Furthermore, the Borrower shall bear, and it shall pay the Lender within seven (7) Business Days of demand by the Lender, all reasonable out of pocket costs and expenses of whatever nature incurred by the Lender, after the acceptance by the Lender of the present offer to enter into this Agreement, in connection with the implementation of this Agreement including, without limitation, costs and expenses arising in connection with the preservation, protection or enforcement of the Lender’s rights under this Agreement. Moreover, the Borrower shall bear, and it shall pay the Lender within seven (7) Business Days of demand by the Lender, any taxes or duties of whatever nature incurred by the Lender in connection with any of the Finance Documents including, without limitation, taxes or duties arising under the Austrian Duties Act (österreichisches Gebührengesetz).

7.4 The Borrower shall, within seven (7) days of demand by the Lender, reimburse the Lender for any incremental costs incurred by the Lender, after the acceptance by the Lender of the present offer to enter into this Agreement, in connection with the funding or maintaining of, or the commitment to fund, the Overdraft Facility which result from the introduction of, or any change in, any applicable law or other legal regulation, or any change in the interpretation or application thereof by any governmental or regulatory authority charged with the administration thereof. The Borrower shall not be required to reimburse the Lender for increased costs attributable to any change in the rate of tax on the general income of Lender, or amounts the Lender has been compensated for pursuant to clause 8.2.

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7.5 Notwithstanding, and without prejudice to, any other rights and claims of the Lender, the Borrower shall, within seven (7) Business Days of demand by the Lender, indemnify the Lender against any cost, loss or liability reasonably incurred by the Lender as a result of:

(i) the occurrence of any Event of Default; and/or

(ii) a failure by the Borrower to comply with any of its obligations under or in connection with this Agreement; and/or

(iii) funding, or making arrangements to fund, any payment orders or debit requests requested by the Borrower but not made by reason of the operation of any provisions of this Agreement (other than by reason of default or negligence by that Lender alone).

8. PAYMENTS

8.1 All payments due from the Borrower under this Agreement shall be

(i) debited by the Lender with value of the relevant due date to the account no. 1-00.640.763: held by the Borrower with the Lender, and

(ii) made by the Borrower no later than 11:00 a.m. (Vienna time) on the relevant due date by transfer to the same account.

Payment shall be made in EURO (except as may be required by clause 4.5) for value on the due date, and it shall be made in full without any withholding or other deduction of any kind or nature (whether in respect of set-off, counterclaim, taxes, duties, charges or otherwise whatsoever).

8.2 If the Borrower is required by law or otherwise to make any withholding or other deduction whatsoever in respect of any amount due under this Agreement, and the Borrower makes such deduction, the Borrower shall increase the sum payable to the Lender in respect of which such deduction was made to the extent necessary to ensure that, after making such deduction, the Lender receives and retains (free from any liability in respect of any such deduction) a net sum equal to the sum which it would have received and so retained had no such deduction been made by the Borrower.

8.3 If, as a result of a payment made by the Borrower under clause 8.2, the Lender has received or been granted a credit against or remission for or deduction or relief from or in respect of any tax payable by it, which is both identifiable and quantifiable by the Lender without requiring it to expend a material amount of time or incur a material cost in so identifying or quantifying (any of the foregoing, to the extent so identifiable and quantifiable, a “Saving”), the Lender shall, to the extent it can do so without prejudice to the retention of the relevant Saving and subject to the Borrower’s obligation to repay promptly on demand by the Lender

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the amount to the Lender if the relevant Saving is subsequently disallowed or cancelled, reimburse the Borrower promptly after receipt of such Saving by the Lender with such amount.

8.4 Any sum due to be paid under this Agreement on a day which is not a Business Day shall be paid on the last preceding Business Day.

8.5 If the Borrower fails to pay any amount payable by it under this Agreement on its due date, the Borrower shall pay default interest on such overdue amount from (and including) the due date up to (and including) the date of actual payment at a rate of three (3) per cent per annum. Default interest shall be paid in addition to interest payable under clause 6. Default interest shall be immediately payable by the Borrower on demand by the Lender. Default interest (if unpaid) arising on an overdue amount will be compounded with such overdue amount at the end of each interest period applicable to that overdue amount but will remain immediately due and payable. Default interest shall be calculated on the basis of the actual number of days elapsed in a year of 360 days.

9. REPRESENTATIONS AND WARRANTIES

9.1 The Borrower represents and warrants to the Lender that:

(i) The Borrower is a company duly established and validly existing under the laws of Austria having its corporate seat and head office in Austria;

(ii) The Borrower has the corporate power to own its assets and to carry on its business as it is being conducted;

(iii) the Borrower has the corporate power to enter into this Agreement and to perform its obligations hereunder, and all necessary action to authorize its entry into this Agreement and its performance hereof has been duly taken;

(iv) each of the Finance Documents is a legal, valid and binding agreement enforceable in accordance with its terms;

(v) the Borrower has taken no corporate action, and no other steps or legal proceedings have been started or, to the best of the Borrower’s knowledge, threatened against it, for its winding-up, dissolution, administration or re-organization or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of it or of all or any material part of its assets or revenues;

(vi) no Default has occurred or will occur as a result of drawing on the Overdraft Facility, and the Borrower is not in breach or in default under any agreement or other instrument to which it is a party or which is binding on it (or any of its assets) to an extent or in a manner which would be reasonably likely to have a material adverse effect on it;

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(vii) no litigation, arbitration or administrative proceeding of or before any court, arbitral body or agency has been started or, to the best of the Borrower’s knowledge, threatened against the Borrower which, if adversely determined, would be reasonably likely to have a material adverse effect on the Borrower;

(viii) to the best of the Borrower’s knowledge, all information supplied by the Borrower or any of its direct or indirect shareholders to the Lender in connection with this Agreement is true, complete and accurate in all material respects;

(ix) the Borrower’s entering into this Agreement and its exercise of its rights and performance of its obligations hereunder do not and will not conflict with any material agreement or material obligation to which the Borrower is a party or which is binding upon it or any of its assets, or conflict with its constitutive documents and internal rules and regulations;

(x) the Borrower is not and will not be insolvent in terms of the Austrian Insolvency Codes (Ausgleichs- und Konkursordnung);

(xi) the Borrower is and will remain a company fully owned and controlled, either directly or indirectly, by UGI Corporation, 460 North Gulph Road, King of Prussia, PA 19406, USA (“UGI Corporation”); and

(xii) the payment obligations of the Borrower under this Agreement rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors.

9.2 The representations and Warranties set out in clause 9.1 are deemed to be repeated by the Borrower (by reference to the facts and circumstances then existing) on each day from the entry into this Agreement to and including the day on which the Finance Documents are terminated and all rights and claims of the Lender under or in connection with the Finance Documents are duly fulfilled.

10. COVENANTS AND UNDERTAKINGS

10.1 The Borrower covenants and undertakes, from the entry into this Agreement to and including the day on ^;which the Finance Documents are terminated and all rights and claims of the Lender under or in connection with the Finance Documents are duly fulfilled, that:

(i) the Borrower shall provide to the Lender such information in relation to its business, operations and financial position as the Lender may reasonably require;

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(ii) the Borrower shall provide, or cause UGI Corporation to provide, the Lender with copies of the audited consolidated financial statements of UGI Corporation within ninety (90) days after the end of the period for which they have been prepared, and copies of the unaudited quarterly consolidated financial statements of UGI Corporation within forty-five (45) days after the end of the period for which they have been prepared;

(iii) the Borrower shall notify the Lender of the occurrence of any Default and/or Event of Default;

(iv) the Borrower shall take out and maintain, or ensure that any of its affiliates takes out and maintains, insurance cover over the Borrower’s assets and other appropriate insurance cover including, but not limited to insurance cover for interruption of business and general liability, of a type and in an amount which is consistent with good business practice;

(v) the Borrower shall ensure that its obligations under this Agreement do and will always rank at least pari passu with its other secured and unsecured obligations, other than obligations to creditors having preference as a matter of mandatory law and other than obligations which already exist and have preference when this Agreement is concluded; as regards the latter obligations, the Borrower shall use reasonable best efforts to provide promptly that such obligations having a material adverse impact on its ability to comply with the terms of this Agreement will have no preference in respect of its obligations under this Agreement;

(vi) the Borrower shall not create or permit to exist any collateral or security interest in favor of one or more third parties on the whole or any part of its present or future property, assets or revenues, without the prior written consent of the Lender which shall not be unreasonably withheld. The provision in the first sentence of this clause 10.1(vi) shall not apply in respect of collateral or security interest created in the ordinary course of business, provided that such collateral or security interest has no material negative impact on the Borrower’s ability to perform under this Agreement;

(vii) the Borrower shall not, without the prior written consent of the Lender which shall not be unreasonably withheld, either in a single transaction or in a series of transactions whether related or not and whether voluntarily or involuntarily, sell, transfer, lease or otherwise dispose of all or a substantial part of its property or assets. The provision in the first sentence of this clause 10.1(vii) shall not apply in respect of dispositions in the ordinary course of business, provided that such dispositions have no negative impact on the Borrower’s ability to perform under this Agreement;

(viii) other than

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(a) intercompany loans in favor of the Borrower’s subsidiaries (including, without limitation, Progas Austria) and the existing loan in the amount of EUR 11,407,482 granted by the Borrower to UGI France, Inc. (now known as UGI Europe, Inc.), and

(b) the Borrower’s undertakings set forth in that certain shareholders’ agreement regarding Zentraleuropa LPG Holding GmbH (as presented by the Borrower to the Lender prior to the entry into this Agreement) so long as the Borrower holds and controls a share of at least 50% in Zentraleuropa LPG Holding GmbH,

the Borrower shall not make any loans or grant any credit or other financing of any kind to or for the benefit of any person or otherwise voluntarily assume any liability, whether actual or contingent, in respect of the obligations of any other person, except within the ordinary course of business, or with the prior written consent of the Lender not to be unreasonably withheld, provided always that such loans, credits, other financings or liabilities have no material negative impact on the Borrower’s ability to perform under this Agreement; and

(ix) the Borrower hereby irrevocably grants a right of first refusal for any and all of its present and future lending transactions in favor of the Lender. It is understood that the Borrower shall have the right to solicit offers from other banks in respect of such transactions. However, the Lender shall have the right to enter into any or all of such transactions, and to provide all related services, at competitive market conditions, if among the banks making offers, the Lender’s offer is at least as competitive as the best offer made among the other banks. It is understood that the Borrower shall not accept a Lender’s offer not made at competitive market conditions.

11. SECURITY

11.1 As security for all present and future rights and claims of the Lender under or in connection with this Agreement the following shall apply:

(i) Under a separate guarantee agreement in form and substance satisfactory to the Lender (the “Guarantee Agreement”), UGI Corporation issues a guarantee in favor of the Lender according to Section 1357 of the Austrian Civil Code(§ 1357 ABGB).

12. DEFAULT

12.1 In the event that:

(i) the Borrower defaults in the payment on the due date of any amount due and payable to the Lender under this Agreement and/or under any other present or future agreement for more than five days; or

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(ii) the Borrower is in material breach of any of the terms and conditions of this Agreement and/or any other present or future agreement with the Lender (other than those referred to in clause 12.1(i)) and, in the case of a breach that is capable of remedy, such breach is not remedied within thirty days after the occurrence of such breach; or

(iii) any of the representations or warranties of the Borrower under this Agreement, or any of the opinions expressed in the legal opinion mentioned in schedule 1, proves to be or becomes incorrect, or any certificate, statement or notice issued to the Lender in connection with this Agreement proves to be or becomes incorrect in a material respect; or

(iv) a material adverse change in the economic situation of the Borrower occurs or threatens to occur; or

(v) any of the following Ratios (as defined in and calculated according to Schedule 3) is achieved:

(a) the Return on Assets is lower than 6.50% (six point five percent), or

(b) the Debt Amortization Period is equal to or longer than 6.75 (six point seventy five) years, or

(c) the Equity Ratio is lower than 15.00% (fifteen percent).

(each an Event of Default), the Lender shall at any time be entitled to terminate this Agreement (whereupon this Agreement shall be terminated with immediate effect), and/or to declare, in whole or in part, any amount(s) outstanding to it under or in connection with this Agreement due and payable (whereupon the respective amounts shall become due and payable with immediate effect), and/or to request that the Borrower provides the Lender with, and grants the Lender a first priority pledge over, a cash deposit in an amount equal to the aggregate commitment of Lender under all Guarantees then outstanding as security for all reimbursement claims of the Lender against the Borrower that may arise in connection with these Guarantees (whereupon the Borrower shall promptly provide such cash deposit and grant such pledge). ‘

12.2 If, as a result of any change in GAAP (as defined in the last paragraph of this clause 12.2) after the entry into this Agreement, any deterioration of any of the Ratios (as defined in Schedule 3) shall have occurred or in the opinion of UGI Corporation would be likely to occur, which change would not have occurred or would not have been likely to occur had no change in GAAP taken place:

(i) such a change in any of the Ratios shall not be considered to constitute an Event of Default or potential Event of Default, and

(ii) in the event of such a change in any of the Ratios, the Borrower shall provide the Lender with a detailed calculation based upon (a) GAAP prior to the change and (b) GAAP after the change, with a reasonable explanation for the differences, and

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(iii) the parties to the Finance Documents shall negotiate in good Faith an amendment to this Agreement which shall approximate to the extent possible the economic effect of the original Ratios taking into account such a change in GAAP.

If said parties do not agree on such amendment within sixty (60) days from the date on which the Borrower first notifies the Lender of such a change in GAAP, the Borrower shall have the option of (i) prepaying in full all amounts outstanding under the Overdraft Facility and all other amounts outstanding under or in connection with this Agreement, or (ii) for purposes of this Agreement, continuing to apply GAAP as in effect prior to such change in GAAP.

“GAAP” means generally accepted accounting principles in the United States of America as in effect at the time of any particular computation or determination or as of the date of the relevant financial statements, as the case may be.

12.3 The Ordinary Income (as defined in Schedule 3) for any period shall be adjusted by the addition of the Ordinary Income of any acquisition made during that period as if such acquisition had occurred on the first day of the period. At the request of the Lender, the Borrower shall provide supporting documents reasonably satisfactory to the Lender relating to the Ordinary Income of the acquisition. _;

12.4 Should the Equity Ratio fall below 15,00% as a result of an acquisition financed with debt,

(i) the Borrower shall have sixty (60) days from the date of the acquisition to cure the cause (or have UGI Corporation cure the cause) of such a change, and

(ii) the Borrower shall immediately provide (or have UGI Corporation provide) reasonable evidence that a cure is possible within the 60 day period, and

(iii) within 30 days of completing an acquisition that would, in its opinion, cause such a change in the Equity Ratio, the Borrower shall provide (or have UGI Corporation provide) a reasonable explanation of the acquisition and a detailed calculation of the Equity Ratio as of the date of the acquisition, and,

(iv) upon curing the cause of such a change of the Equity Ratio, the Borrower shall provide (or have UGI Corporation provide) a reasonable explanation of the cure and a detailed calculation of the Equity Ratio that reflects the cure.

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13. MISCELLANEOUS

13.1  If any of the provisions of this Agreement are or become invalid or unenforceable in any respect, the validity and enforceability of the remaining provisions shall not in any way be affected or impaired.

13.2  Any notice or communication under or in connection with this Agreement shall be in writing and shall be delivered by mail, fax, courier or email to the addresses given in this Agreement or at such other address as the recipient may have notified to the other party in writing.

13.3  The Borrower may not assign, pledge or dispose otherwise of any of its rights or claims under or in connection with this Agreement without the prior written consent of the Lender. •

13.4  The Lender may grant participations, and/or assign or transfer any or all of its rights or claims under or in connection with this Agreement to other financial institutions with the prior written consent of the Borrower only, which consent shall not be unreasonably withheld. Such consent, however, shall not be required for the granting of participations, nor for any assignment or transfer, to any members of the Raiffeisen Banking Group.

13.5  No failure by the Lender to exercise, nor any delay by the Lender in exercising, any right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise thereof or the exercise of any other right or remedy. The rights and remedies provided herein are cumulative and not exclusive of any rights or remedies provided by law.

13.6  The Borrower hereby irrevocably agrees to the electronic processing of all information and data concerning the Borrower and/or any of its affiliated companies which become known to the Lender in the course of the business relationship with the Borrower or any of its affiliated companies, and to the disclosure and forwarding of such information and data (except information and data regarding confidential know-how of the Borrower or any of its affiliates as well as confidential business or financial information explicitly identified by the Borrower in writing as being confidential as required by any law or legal regulation applicable to the Borrower or to any of its affiliates) within the internal organization of the Lender as well as to any domestic or foreign member companies of the Raiffeisen Banking Group and any (potential) parties of syndication or risk participation or security agreements. Prior to releasing any information or data to other parties (including companies of the Raiffeisen Banking Group) provided by the Borrower, the Lender shall enter into a written confidentiality agreement with the recipient of such information or data requiring it to maintain the confidentiality of the information or data, whereby such recipient shall be entitled to electronically process the information or data for internal use.

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13.7  All present and future obligations under or in connection with this Agreement have to be fulfilled at the Lender’s premises at Am Stadtpark 9, 1030 Vienna.

13.8  In addition to the terms of this Agreement, the General Terms and Conditions (Version 2001) of the Lender shall apply subsidiarily.

13.9  This Agreement shall be governed by and construed in accordance with the Austrian law. Under this Agreement, a Business Day means a day (other than a Saturday or Sunday) on which banks are open for general business in Vienna/Austria, and which is (in relation to any date for payment or purchase of EURO) a TARGET Day (“TARGET” meaning Trans-European Automated Real-time Gross Settlement Express Transfer payment system).

13.10  Any dispute, controversy or claim arising out of or in connection with this Agreement shall non exclusively be settled by the competent commercial court of Vienna.

UNQUOTE

The present offer shall be irrevocably valid and binding until 30 September 2006. If you accept this offer, we shall pay you an up-front fee of EURO 100 flat. You can accept this offer by debiting our account no. 1-00.640.763 with such up-front fee. You are hereby irrevocably authorized to make such debit entry. Upon such debit entry only, the present offer shall be validly accepted irrespective of whether and when we will be informed of your acceptance.

Kind regards

Flaga GmbH

Schedule 1	List of Condition Precedent Documents
Schedule 2	Mandatory Cost Formulae
Schedule 3	Ratios and Manner of Calculation

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SCHEDULE 1

Condition Precedent Documents

1. A duly executed original of each Finance Document.

2. A copy of the constitutional documents of the Borrower and the Guarantor (individually also an “Obligor”).

3. An extract of the commercial (or equivalent) register of each Obligor.

4. A copy of a resolution of the directors, the board of directors or any other relevant board, body or person of each Obligor:

(i) approving the terms of, and the transactions contemplated by, the Finance Documents to which an Obligor is a party and resolving to execute the Finance Documents to which it is a party;

(ii) authorizing a specified person or persons to execute the Finance Documents to which it is a party on its behalf; and

(iii) authorizing a specified person or persons, on its behalf, to sign and/or dispatch all documents, notices and other communication to be signed and/or dispatched by it under or in connection with the Finance Documents to which it is a party.

5. A specimen of the signature of each person authorized by the resolution referred to in point 4 (iii) above.

6. A certificate provided by an authorized signatory of the relevant Obligor certifying that each copy document relating to it specified in this schedule 1 is true and correct, complete and in full force and effect as at a date no earlier than the entry into this Agreement.

7. A duly executed original of a letter from the process agent referred to in clause 13 of the Guarantee Agreement confirming that it has been appointed by the relevant Obligor and that it has accepted such appointment.

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8. A duly executed original of a legal opinion by Morgan Lewis & Bockius LLP, Philadelphia, USA, in respect of the Guarantee Agreement

9. Any other document or evidence the Lender may reasonably require.

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SCHEDULE 2

Mandatory Cost Formulae

1. The Mandatory Cost is an addition to the interest rate to compensate the Lender for the cost of compliance with (a) the new requirements of any national bank (b) in either case, new requirements of any other authority which replaces all or any of its functions, (c) the new requirements of the European Central Bank (in this Clause 1, “new requirements” means requirements introduced and coming into force after the Date of this Agreement).

2. On the first day of each Interest Period (or as soon as possible thereafter) the Lender shall calculate, as a percentage rate, a rate (hereinafter referred to as the “Additional Cost Rate”) in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Lender as a weighted average of the Lender’s Additional Cost Rates and will be expressed as a percentage rate per annum.

3. The Additional Cost Rate for the Lender will be the percentage notified by the Lender as the cost of complying with the minimum reserve requirements of the Austrian National Bank and/or any other authorities referred to in Clause 1 above.

4. Any determination by the Lender pursuant to this schedule 2 in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to the Lender shall, in the absence of manifest error, be conclusive and binding on all parties to this Agreement.

5. The Lender may from time to time, after consultation with the Borrower, determine and notify to the Borrower any amendments which are required to be made to this schedule 2 in order to comply with any change in law, regulation or any requirements from time to time imposed by the Austrian National Bank and/or any other authorities referred to in Clause 1 above, and any such determination shall, in the absence of manifest error, be conclusive and binding on all parties to this Agreement.

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SCHEDULE 3

Ratios; Manner of Calculation

I.) Ratios.

Certain financial ratios of UGI Corporation (on a consolidated basis) (individually a “Ratio” and collectively the “Ratios”) are defined as follows:

Equity Ratio as % of total assets means Total Equity divided by Average Adjusted Total Assets.

Return on Assets means Ordinary Income divided by Average Adjusted Total Assets.

Debt Amortization Period means Net Debt divided by EBTDA.

whereas the meaning of capitalized terms shall be as follows:

TOTAL EQUITY means Total Stockholders’ Equity according to quarterly/annual report plus Minority Interests.

AVERAGE ADJUSTED TOTAL ASSETS means the sum of Total Assets according to quarterly/annual report for each of the past four (4) financial quarters divided by four (4).

ORDINARY INCOME means operating income according to quarterly/annual reports.

EBTDA means Ordinary Income plus Depreciation and Amortization minus Interest Expense.

NET DEBT means Current Maturities of Long Term Debt plus Bank Loans plus Long Term Debt (altogether “INTEREST-BEARING LIABILITIES”) minus Cash and cash equivalents minus Short-term investments.

II.) Manner of Calculating Ratios:

The Ratios shall be calculated by the Lender in accordance with the terms set forth in this schedule 3 on the basis of the consolidated financial statements of UGI Corporation to be provided pursuant to clause 10.1(ii), beginning with the consolidated quarterly financial statements of UGI Corporation for the first calendar quarter of 2006. UGI Corporation may, at its discretion, provide its calculation of such Ratios together with the submission of the financial statements that are required to be submitted pursuant to clause 10.1(ii). For the sake of clarification, however, it is hereby stated that only the calculation by the Lender is relevant for the purpose of this Agreement.

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EX-10.10

Exhibit 10.10

Zentraleuropa LPG Holding GmbH

Flaga Straße 1

2100 Leobendorf

Austria

Raiffeisen Zentralbank Österreich
Aktiengesellschaft
Am Stadtpark 9
1030 Vienna
Austria	Bratislava, 26 July 2006

Re: Multi Currency Facility Offer

Dear Sirs,

We, Zentraleuropa LPG Holding GmbH, an Austrian company registered under FN 276576 f in the companies book (Firmenbuch) of the Landesgericht Korneuburg with its seat at Leobendorf and its business address at Flaga Straße 1, 2100 Leobendorf, herewith offer Raiffeisen Zentralbank Österreich Aktiengesellschaft to enter with us into the following Multi Currency Facility agreement (for the sake of clarification it is hereby stated that up to now such Multi Currency Facility agreement has not been entered into in whatever form):

Quote

Facility Agreement

entered into by and between

Zentraleuropa LPG Holding GmbH, Flaga Straße 1, 2100 Leobendorf, Austria (attention: Managing Director (Josef F. Weinzierl); email: weinzierl@flaga.at) (the “Borrower”),

and

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Raiffeisen Zentralbank Österreich Aktiengesellschaft, Am Stadtpark 9, 1030 Vienna, Austria (attention: Peter Straubinger; email: peter.straubinqer@rzb.at) (the “Lender”).

1. FACILITY

1.1 Subject to the terms of this working capital facility agreement (the “Agreement”), the Lender makes available to the Borrower a revolving Multi Currency Facility (the “Facility”) in the aggregate maximum amount of EURO 8,000,000.00 (eight million), which amount may be, at the Borrower’s option, reduced to EURO 7,000,000 (seven million) upon five Business Days advanced written notice delivered by the Borrower to the Lender (the “Maximum Facility Amount”).

1.2 The Facility can be utilized in the form of fixed term advances as multi-currency credit facility in EURO (EUR), Polish Zloty (PLN), Czech Koruna (CZK), Slovak Koruna (SKK), Hungarian Forint (HUF) and Romanian Lei (RON) (each a “Permitted Currency”), provided that the aggregate amount outstanding shall never exceed the Maximum Facility Amount.

2. PURPOSE

2.1 The Borrower shall use all amounts borrowed under this Agreement for providing working capital to its subsidiaries.

2.2 Except for its undertakings in clause 4.2, the Lender is not bound to monitor or verify the application of any amount borrowed under this Agreement.

3. CONDITIONS OF UTILIZATION

3.1 The Borrower may not utilize the Facility unless the following conditions precedent have been fulfilled:

(i) This Agreement has been duly executed and come into full force and effect; and

(ii) the guarantee agreement referred to in clause 11.1(i) (the “Guarantee Agreement”) has been duly signed and come into full force and effect; and

(iii) the rights and interest of the Lender under the Guarantee Agreement (together with this Agreement the “Finance Documents”) have been created in a valid, binding and enforceable manner; and

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(iv) the representations and warranties set forth in clause 9.1 are true and correct; and

(v) no event or circumstance as specified in clause 12.1 (a “Default”), which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an event of default as defined in clause 12.1 (an “Event of Default”), has occurred or threatens to occur; and

(vi) the Lender has received the documents and other evidence listed in schedule 1, and it has found such documents in form and substance acceptable and satisfactory to it.

4. UTILIZATION

4.1 The Borrower may utilize the Facility on a revolving basis by delivery to the Lender of a duly completed utilization request in the form of schedule 2 (a “Utilization Request”) to be received by the Lender no later than 11 a.m. (Vienna time) on the day falling three (3) Business Days (as defined below in this clause 4.1) before the proposed disbursement date, provided always that:

(i) the Utilization Request shall specify the requested Permitted Currency of the Advance; and .

(ii) the number of Advances outstanding in a Permitted Currency does not exceed one; and

(iii) the amount of the requested Advance shall be at least EURO 100,000 or its equivalent in a Permitted Currency; and

(iv) the term of the requested Advance (the “Term”) shall be one (1), two (2) or six (6) months; and

(v) the terms of the requested Advance shall not extend beyond 364 days after the acceptance of this offer (the “Final Maturity Date”); and

(vi) the amount of the requested Advance, together with all amounts then outstanding shall not exceed the Maximum Facility Amount.

Each Utilization Request shall be irrevocable.

Under this Agreement, a Business Day means a day on which banks in Vienna, or (for the purpose of payments in currencies other than EUR) at the principal financial centre of the relevant currency, are open for the transaction of general business, or (for the purpose of payments in EUR) which is a TARGET Day. TARGET Day means a day on which TARGET is open for the settlement of

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payments in EUR (“TARGET” meaning Trans-European Automated Real-time Gross Settlement Express Transfer payment system).

4.2 Subject to the terms of this Agreement, the Lender shall disburse to the Borrower the amount of the requested Advance on the disbursement date as proposed by the Borrower in its Utilization Request by transfer to the following current accounts held by the Borrower with the Lender depending on the currency in which the Advance is utilized:

- EUR     1-04.065.108

- PLN     36-54.065.107

- SKK     38-54.065.107

- CZK     88-54.065.107

- RON     95-54.065.107

- HUF     98-54.065.107

5. REPAYMENT

5.1 The Borrower shall repay each Advance on the last day of its Term together with accrued interest. All amounts outstanding shall be repaid on the day falling 364 days after the acceptance of this offer.

5.2 The Borrower may at any time, if it gives the Lender not less than 5 Business Days prior notice, prepay the whole or any part of an Advance plus Break Costs. For the purpose of this Agreement “Break Costs” means the amount (if any) by which the interest which the Lender should have received for the period from the date of receipt of an Advance to the last day of the Term of the relevant Advance had the Advance received been paid on the last day of that Term exceeds the amount which the Lender would be able to obtain by placing an amount equal to that Advance received by it on deposit with a leading bank in the relevant interbank market for a period starting on the Business Day following receipt or recovery of the prepayment and ending on the last day of the current Term.

5.3 Subject to clause 4.1., the Borrower may re-borrow any amount re–paid or pre paid under this Agreement.

6. INTEREST

6.1 The interest period for an Advance shall be the period from the date of its utilization until the last day of its Term or, as the case may be, the effective date of the prepayment of the entire amount of such Advance pursuant to clause 5.2.

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6.2 The rate of interest on an Advance outstanding shall be the percentage rate per annum which is the aggregate of:

(i) The applicable Indicator (as defined in clause 6.3); and

(ii) a margin of 50.00 (fifty point zero) basis points; and

(iii) the applicable Mandatory Cost, if any, being the percentage rate per annum calculated by the Lender in accordance with schedule 2.

6.3 “Indicator” means

a) In case of an Advance in EURO the applicable EURIBOR:

(i) the rate per annum (rounded up to three decimal places) for deposits in EURO for a term comparable to the relevant interest period which appears on the Reuters page “EURIBOR 01” (or any successor to such page) published or reported by REUTERS or such other electronic information service as selected by the Lender; or

(ii) if no such rate is then available, the rate which is determined by the Lender to be the arithmetic mean (rounded up to three decimal places) of the rates per annum for such deposits in EURO offered by three major banks on the European interbank market selected by the Lender, at or about 11 a.m. (Vienna time) on the second TARGET Day before the commencement of the respective interest period.

b) in case of an Advance in Polish Zloty the applicable WIBOR:

(i) the rate per annum (rounded up to three decimal places) for deposits in Polish Zloty for a term comparable to the relevant interest period which appears on the Reuters Screen Page (or any successor to such page) published or reported by REUTERS or such other electronic information service as selected by the Lender; or.

(ii) if no such rate is then available, the rate which is determined by the Lender to be the arithmetic mean (rounded up to three decimal places) of the rates per annum for such deposits in Polish Zloty offered by three major banks on the Warsaw interbank market selected by the Lender, at or about 11 a.m. (Warsaw time) on the second Business Day before the commencement of the respective interest period.

c) In case of an Advance made in Czech Koruna the applicable PRIBOR:

(i) the rate per annum (rounded up to three decimal places) for deposits in Czech Koruna for a term comparable to the relevant interest period which appears on the Reuters Screen PRBO Page (or any successor to such page) published or reported by REUTERS or such other electronic information service as selected by the Lender; or

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(ii) if no such rate is then available, the rate which is determined by the Lender to be the arithmetic mean (rounded up to three decimal places) of the rates per annum for such deposits in Czech Koruna offered by three major banks on the Prague interbank market selected by the Lender, at or about 11 a.m. (Prague time) on the second Business Day before the commencement of the respective interest period.

d) In case of an Advance made in Slovak Koruna the applicable BRIBOR:

(i) the rate per annum (rounded up to three decimal places) for deposits in Slovak Koruna for a term comparable to the relevant interest period which appears on the Reuters Screen BRBO Page (or any successor to such page) published or reported by REUTERS or such other electronic information service as selected by the Lender; or

(ii) if no such rate is then available, the rate which is determined by the Lender to be the arithmetic mean (rounded up to three decimal places) of the rates per annum for such deposits in Slovak Koruna offered by three major banks on the Bratislava interbank market selected by the Lender, at or about 11 a.m. (Bratislava time) on the second Business Day before the commencement of the respective interest period.

e) In case of an Advance made in Hungarian Forint the applicable BUBOR:

(i) the rate per annum (rounded up to three decimal places) for deposits in Hungarian Forint for a term comparable to the relevant interest period which appears on the Reuters Screen BUBOR Page (or any successor to such page) published or reported by REUTERS or such other electronic information service as selected by the Lender; or

(ii) if no such rate is then available, the rate which is determined by the Lender to be the arithmetic mean (rounded up to three decimal places) of the rates per annum for such deposits in Hungarian Forint offered by three major banks on the Budapest interbank market selected by the Lender, at or about 11 a.m. (Budapest time) on the second Business Day before the commencement of the respective interest period.

f) In case of an Advance made in Romanian Lei the applicable RONIBOR:

(i) the rate per annum (rounded up to three decimal places) for deposits in Romanian Lei for a term comparable to the relevant interest period which appears on the Reuters Screen ROBOR Page (or any successor to such page) published or reported by REUTERS or such other electronic information service as selected by the Lender; or

(ii) if no such rate is then available, the rate which is determined by the Lender to be the arithmetic mean (rounded up to three decimal places) of the rates per annum for such deposits in Romanian Lei offered by three

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major banks on the Bucharest interbank market selected by the Lender, at or about 11 a.m, (Bucharest time) on the second Business Day before the commencement of the respective interest period.

6.4 Interests shall be calculated for each interest period of an Advance on the basis of actual number of days elapsed in a year of 360 days.

6.5 Interest for each Advance shall be paid by the Borrower to the Lender on the last day of its Term.

7. FEES, COSTS AND EXPENSES, INDEMNITIES

7.1 The Borrower shall pay the Lender a commitment fee of 12.50 (twelve point fifty) basis points per annum on the balance from time to time between the Maximum Facility Amount on the one hand and the aggregate amount of the Advances utilized hereunder on the other hand. The commitment fee shall be calculated for each calendar quarter on the basis of the actual number of days elapsed in a year of 360 days, and it shall be paid in arrears on the last day of the calendar quarter for which it is calculated.

7.2 The Borrower shall bear and pay all costs of the legal opinions mentioned in schedule 1. Furthermore, the Borrower shall bear, and it shall pay the Lender within seven (7) Business Days of demand by the Lender, all reasonable out of pocket costs and expenses of whatever nature incurred by the Lender, after the acceptance by the Lender of the present offer to enter into this Agreement, in connection with the implementation of this Agreement including, without limitation, costs and expenses arising in connection with the preservation, protection or enforcement of the Lender’s rights under this Agreement. Moreover, the Borrower shall bear, and it shall pay the Lender within seven (7) Business Days of demand by the Lender, any taxes or duties of whatever nature incurred by the Lender in connection with any of the Finance Documents including, without limitation, taxes or duties arising under the Austrian Duties Act (österreichisches Gebührengesetz).

7.3 The Borrower shall, within seven (7) days of demand by the Lender, reimburse the Lender for any incremental costs incurred by the Lender, after the acceptance by the Lender of the present offer to enter into this Agreement, in connection with the making or maintaining of, or the commitment to make, the Advance which result from the introduction of, or any change in, any applicable law or other legal regulation, or any change in the interpretation or application thereof by any governmental or regulatory authority charged with the administration thereof. The Borrower shall not be required to reimburse the Lender for increased costs attributable to any change in the rate of tax on the general income of Lender, or amounts the Lender has been compensated for pursuant to clause 8.2.

7.4 Notwithstanding, and without prejudice to, any other rights and claims of the Lender, the Borrower shall, within seven (7) Business Days of demand by the

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Lender, indemnify the Lender against any cost, loss or liability reasonably incurred by the Lender as a result of:

(i) the occurrence of any Event of Default; and/or

(ii) a failure by the Borrower to comply with any of its obligations under or in connection with this Agreement; and/or

(iii) funding, or making arrangements to fund, any Advance requested by the Borrower but not made by reason of the operation of any provisions of this Agreement (other than by reason of default or negligence by that Lender alone); and/or

(iv) the Advance (or part of the Advance) not being prepaid in accordance with a notice of Prepayment given by the Borrower.

8. PAYMENTS

8.1 All payments due from the Borrower under this Agreement shall be

(i) debited by the Lender with value of the relevant due date to the following current accounts, held by the Borrower with the Lender depending on the currency in which the payments are due:

- EUR     1-04.065.108

- PLN   36-54.065.107

- SKK   38-54.065.107

- CZK   88-54.065.107

- RON   95-54.065.107

- HUF   98-54.065.107

(ii) and, made by the Borrower no later than 11:00 a.m. (Vienna time) on the relevant due date by transfer to the same account.

Payment shall be made in the relevant Permitted Currency for value on the relevant due date, and it shall be made in full without any withholding or other deduction of any kind or nature (whether in respect of set-off, counterclaim, taxes, duties, charges or otherwise whatsoever).

8.2 If the Borrower is required by law or otherwise to make any withholding or other deduction whatsoever in respect of any amount due under this Agreement, and the Borrower makes such deduction, the Borrower shall increase the sum payable to the Lender in respect of which such deduction was made to the extent necessary to ensure that, after making such deduction, the Lender receives and retains (free from any liability in respect of any such deduction) a net sum equal to the sum which it would have received and so retained had no such deduction been made by the Borrower.

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8.3 If, as a result of a payment made by the Borrower under clause 8.2, the Lender has received or been granted a credit against or remission for or deduction or relief from or in respect of any tax payable by it, which is both identifiable and quantifiable by the Lender without requiring it to expend a material amount of time or incur a material cost in so identifying or quantifying (any of the foregoing, to the extent so identifiable and quantifiable, a “Saving”), the Lender shall, to the extent it can do so without prejudice to the retention of the relevant Saving and subject to the Borrower’s obligation to repay promptly on demand by the Lender the amount to the Lender if the relevant Saving is subsequently disallowed or cancelled, reimburse the Borrower promptly after receipt of such Saving by the Lender with such amount.

8.4 Any sum due to be paid under this Agreement on a day which is not a Business Day shall be paid on the last preceding Business Day.

8.5 If the Borrower fails to pay any amount payable by it under this Agreement on its due date, the Borrower shall pay default interest on such overdue amount from (and including) the due date up to (and including) the date of actual payment at a rate of three (3) per cent per annum. Default interest shall be paid in addition to interest payable under clause 6. Default interest shall be immediately payable by the Borrower on demand by the Lender. Default interest (if unpaid) arising on an overdue amount will be compounded with such overdue amount at the end of each interest period applicable to that overdue amount but will remain immediately due and payable. Default interest shall be calculated on the basis of the actual number of days elapsed in a year of 360 days.

9. REPRESENTATIONS AND WARRANTIES

9.1 The Borrower represents and warrants to the Lender that:

(i) The Borrower is a company duly established and validly existing under the laws of Austria having its corporate seat and head office in Austria;

(ii) The Borrower has the corporate power to own its assets and to carry on its business as it is being conducted;

(iii) the Borrower has the corporate power to enter into this Agreement and to perform its obligations hereunder, and all necessary action to authorize its entry into this Agreement and its performance hereof has been duly taken;

(iv) each of the Finance Documents is a legal, valid and binding agreement enforceable in accordance with its terms;

(v) the Borrower has taken no corporate action, and no other steps or legal proceedings have been started or, to the best of the Borrower’s knowledge, threatened against it, for its winding-up, dissolution, administration or re-organization or for the appointment of a receiver,

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administrator, administrative receiver, trustee or similar officer of it or of all or any material part of its assets or revenues;

(vi) no Default has occurred or will occur as a result of making an Advance, and the Borrower is not in breach or in default under any agreement or other instrument to which it is a party or which is binding on it (or any of its assets) to an extent or in a manner which would be reasonably likely to have a material adverse effect on it;

(vii) no litigation, arbitration or administrative proceeding of or before any court, arbitral body or agency has been started or, to the best of the Borrower’s, knowledge, threatened against the Borrower which, if adversely determined, would be reasonably likely to have a material adverse effect on the Borrower;

(viii) to the best of the Borrower’s knowledge, all information supplied by the Borrower to the Lender in connection with this Agreement is true, complete and accurate in all material respects;

(ix) the Borrower’s entering into this Agreement and its exercise of its rights and performance of its obligations hereunder do not and will not conflict with any material agreement or material obligation to which the Borrower is a party or which is binding upon it or any of its assets, or conflict with its constitutive documents and internal rules and regulations;

(x) the Borrower is not and will not be insolvent in terms of the Austrian Insolvency Codes (Ausgleichs- und Konkursordnung);

(xi) the Borrower is and will remain a company owned and controlled, either directly or indirectly, 50% by UGI Corporation, 460 North Gulph Road, King of Prussia, PA 19406, USA (“UGI Corporation”) and 50% by Progas-Lager- und Abfüllanlagengesellschaft m.b.H. BuschgrundstraBe 6, D-45894 Gelsenkirchen, Germany; and

(xii) the payment obligations of the Borrower under this Agreement rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors.

9.2 The representations and warranties set out in clause 9.1 are deemed to be repeated by the Borrower (by reference to the facts and circumstances then existing) on each day from the entry into this Agreement to and including the day on which the Finance Documents are terminated and all rights and claims of the Lender under or in connection with the Finance Documents are duly fulfilled.

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10. COVENANTS AND UNDERTAKINGS

10.1 The Borrower covenants and undertakes, from the entry into this Agreement to and including the day on which the Finance Documents are terminated and all rights and claims of the Lender under or in connection with the Finance Documents are duly fulfilled, that:

(i) the Borrower shall provide to the Lender such information in relation to its business, operations and financial position as the Lender may reasonably require;

(ii) the Borrower shall provide, or cause UGI Corporation to provide, the Lender with copies of the audited consolidated financial statements of UGI Corporation within ninety (90) days after the end of the period for which they have been prepared, and copies of the unaudited quarterly consolidated financial statements of UGI Corporation within forty-five (45) days after the end of the period for which they have been prepared;

(iii) the Borrower shall notify the Lender of the occurrence of any Default and/or Event of Default;

(iv) the Borrower shall take out and maintain, or ensure that any of its affiliates takes out and maintains, insurance cover over the Borrower’s assets and other appropriate insurance cover including, but not limited to insurance cover for interruption of business and general liability, of a type and in an amount which is consistent with good business practice;

(v) the Borrower shall ensure that its obligations under this Agreement do and will always rank at least pari passu with its other secured and unsecured obligations, other than obligations to creditors having preference as a matter of mandatory law and other than obligations which already exist and have preference when this Agreement is concluded; as regards the latter obligations, the Borrower shall use reasonable best efforts to provide promptly that such obligations having a material adverse impact on its ability to comply with the terms of this Agreement will have no preference in respect of its obligations under this Agreement;

(vi) the Borrower shall not create or permit to exist any collateral or security interest in favor of one or more third parties on the whole or any part of its present or future property, assets or revenues, without the prior written consent of the Lender which shall not be unreasonably withheld. The provision in the first sentence of this clause 10.1 (vi) shall not apply in respect of collateral or security interest created in the ordinary course of business, provided that such collateral or security interest has no material negative impact on the Borrower’s ability to perform under this Agreement;

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(vii) the Borrower shall not, without the prior written consent of the Lender which shall not be unreasonably withheld, either in a single transaction or in a series of transactions whether related or not and whether voluntarily or involuntarily, sell, transfer, lease or otherwise dispose of all or a substantial part of its property or assets. The provision in the first sentence of this clause 10.1(vii) shall not apply in respect of dispositions in the ordinary course of business, provided that such dispositions have no negative impact on the Borrower’s ability to perform under this Agreement; and

(viii) other than intercompany loans in favor of the Borrower’s subsidiaries the Borrower shall not make any loans or grant any credit or other financing of any kind to or for the benefit of any person or otherwise voluntarily assume any liability, whether actual or contingent, in respect of the obligations of any other person, except within the ordinary course of business, or with the prior written consent of the Lender not to be unreasonably withheld, provided always that such loans, credits, other financings or liabilities have no material negative impact on the Borrower’s ability to perform under this Agreement.

11. SECURITY

11.1 As security for all present and future rights and claims of the Lender under or in connection with this Agreement the following shall apply:

(i) Under a separate guarantee agreement in form and substance satisfactory to the Lender (the “Guarantee Agreement”), UGI Corporation issues a guarantee in favor of the Lender according to Section 1357 of the Austrian Civil Code (§ 1357 ABGB).

12. DEFAULT

12.1 In the event that:

(i) the Borrower defaults in the payment on the due date of any amount due and payable to the_; Lender under this Agreement and/or under any other present or future agreement for more than five days; or

(ii) the Borrower is in material breach of any of the terms and conditions of this Agreement and/or any other present or future agreement with the Lender (other than those referred to in clause 12.1(i)) and, in the case of a breach that is capable of remedy, such breach is not remedied within thirty days after the occurrence of such breach; or

(iii) any of the representations or warranties of the Borrower under this Agreement, or any of the opinions expressed in the legal opinion

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mentioned in schedule 1, proves to be or becomes incorrect, or any certificate, statement or notice issued to the Lender in connection with this Agreement proves to be or becomes incorrect in a material respect; or

(iv) a material adverse change in the economic situation of the Borrower occurs or threatens to occur; or

(v) any of the following Ratios (as defined in and calculated according to Schedule 4) is achieved:

(a) the Return on Assets is lower than 6,50% (six point five percent), or

(b) the Debt Amortization Period is equal to or longer than 6,75 (six point seventy five) years, or

(c) the Equity Ratio is lower than 15,00% (fifteen percent).

(each an Event of Default), the Lender shall at any time be entitled to terminate this Agreement (whereupon this Agreement shall be terminated with immediate effect), and/or to declare, in whole or in part, any amount(s) outstanding to it under or in connection with this Agreement due and payable (whereupon the respective amounts shall become due and payable with immediate effect).

12.2 If, as a result of any change in GAAP (as defined in the last paragraph of this clause 12.2) after the entry into this Agreement, any deterioration of any of the Ratios (as defined in Schedule 4) shall have occurred or in the opinion of UGI Corporation would be likely to occur, which change would not have occurred or would not have been likely to occur had no change in GAAP taken place:

(i) such a change in any of the Ratios shall not be considered to constitute an Event of Default or potential Event of Default, and

(ii) in the event of such a change in any of the Ratios, the Borrower shall provide the Lender with a detailed calculation based upon (a) GAAP prior to the change and (b) GAAP after the change, with a reasonable explanation for the differences, and

(iii) the parties to the Finance Documents shall negotiate in good faith an amendment to this Agreement which shall approximate to the extent possible the economic effect of the original Ratios taking into account such a change in GAAP.

If said parties do not agree on such amendment within sixty (60) days from the date on which the Borrower first notifies the Lender of such a change in GAAP, the Borrower shall have the option of (i) prepaying in full all amounts outstanding under the Overdraft Facility and all other amounts outstanding under or in connection with this Agreement, or (ii) for purposes of this Agreement, continuing to apply GAAP as in effect prior to such change in GAAP.

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“GAAP” means generally accepted accounting principles in the United States of America as in effect at the time of any particular computation or determination or as of the date of the relevant financial statements, as the case may be.

12.3 The Ordinary Income (as defined in Schedule 4) for any period shall be adjusted by the addition of the Ordinary Income of any acquisition made during that period as if such acquisition had occurred on the first day of the period. At the request of the Lender, the Borrower shall provide supporting documents reasonably satisfactory to the Lender relating to the Ordinary Income of the acquisition.

12.4 Should the Equity Ratio fall below 15.00% as a result of an acquisition financed with debt,

(i) the Borrower shall have sixty (60) days from the date of the acquisition to cure the cause (or have UGI Corporation cure the cause) of such a change, and

(ii) the Borrower shall immediately provide (or have UGI Corporation provide) reasonable evidence that a cure is possible within the 60 day period, and

(iii) within 30 days of completing an acquisition that would, in its opinion, cause such a change in the Equity Ratio, the Borrower shall provide (or have UGI Corporation provide) a reasonable explanation of the acquisition and a detailed calculation of the Equity Ratio as of the date of the acquisition, and,

(iv) upon curing the cause of such a change of the Equity Ratio, the Borrower shall provide (or have UGI Corporation provide) a reasonable explanation of the cure and a detailed calculation of the Equity Ratio that reflects the cure.

13. MISCELLANEOUS

13.1 If any of the provisions of this Agreement are or become invalid or unenforceable in any respect, the validity and enforceability of the remaining provisions shall not in any way be affected or impaired.

13.2 Any notice or communication under or in connection with this Agreement shall be in writing and shall be delivered by mail, fax, courier or email to the addresses given in this Agreement or at such other address as the recipient may have notified to the other party in writing.

13.3 The Borrower may not assign, pledge or dispose otherwise of any of its rights or claims under or in connection with this Agreement without the prior written consent of the Lender.

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13.4 The Lender may grant participations, and/or assign or transfer any or all of its rights or claims under or in connection with this Agreement to other financial institutions with the prior written consent of the Borrower only, which consent shall not be unreasonably withheld. Such consent, however, shall not be required for the granting of participations, nor for any assignment or transfer, to any members of the Raiffeisen Banking Group.

13.5 No failure by the Lender to exercise, nor any delay by the Lender in exercising, any right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise thereof or the exercise of any other right or remedy. The rights and remedies provided herein are cumulative and not exclusive of any rights or remedies provided by law.

13.6 The Borrower hereby irrevocably agrees to the electronic processing of all information and data concerning the Borrower and/or any of its affiliated companies which become known to the Lender in the course of the business relationship with the Borrower or any of its affiliated companies, and to the disclosure and forwarding of such information and data (except information and data regarding confidential know-how of the Borrower or any of its affiliates as well as confidential business or financial information explicitly identified by the Borrower in writing as being confidential as required by any law or legal regulation applicable to the Borrower or to any of its affiliates) within the internal organization of the Lender as well as to any domestic or foreign member companies of the Raiffeisen Banking Group and any (potential) parties of syndication or risk participation or security agreements. Prior to releasing any information or data to other parties (including companies of the Raiffeisen Banking Group) provided by the Borrower, the Lender shall enter into a written confidentiality agreement with the recipient of such information or data requiring it to maintain the confidentiality of the information or data, whereby such recipient shall be entitled to electronically process the information or data for internal use.

13.7 All present and future obligations under or in connection with this Agreement have to be fulfilled at the Lender’s premises at Am Stadtpark 9, 1030 Vienna.

13.8 In addition to the terms of this Agreement, the General Terms and Conditions (Version 2001) of the Lender shall apply subsidiarily.

13.9 This Agreement shall be governed by and construed in accordance with the Austrian law.

13.10  Any dispute, controversy or claim arising out of or in connection with this Agreement shall non exclusively be settled by the competent commercial court of Vienna.

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UNQUOTE

The present offer shall be irrevocably valid and binding until 30 September 2006. If you accept this offer, we shall pay you an up-front fee of EURO 100 flat. You can accept this offer by debiting our account no. 1-04.065.108 with such up-front fee. You are hereby irrevocably authorized to make such debit entry. Upon such debit entry only, the present offer shall be validly accepted irrespective of whether and when we will be informed of your acceptance.

Kind regards,

Zentraleuropa LPG Holding GmbH

Schedule 1	List of Condition Precedent Documents
Schedule 2	Form of Utilization Request
Schedule 3	Mandatory Cost Formulae
Schedule 4	Ratios; Manner of Calculation

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SCHEDULE 1

Condition Precedent Documents

1. A duly executed original of each Finance Document.

2. A copy of the constitutional documents of the Borrower and the Guarantor (individually also an “Obligor”).

3. An extract of the commercial (or equivalent) register of each Obligor.

4. A copy of a resolution of the directors, the board of directors or any other relevant board, body or person of each Obligor:

(i) approving the terms of, and the transactions contemplated by, the Finance Documents to which an Obligor is a party and resolving to execute the Finance Documents to which it is a party;

(ii) authorizing a specified person or persons to execute the Finance Documents to which it is a party on its behalf; and

(iii) authorizing a specified person or persons, on its behalf, to sign and/or dispatch all documents, notices and other communication (including, without limitation, any Utilization Request) to be signed and/or dispatched by it under or in connection with the Finance Documents to which it is a party.

5. A specimen of the signature of each person authorized by the resolution referred to in point 4 (iii) above.

6. A certificate provided by an authorized signatory of the relevant Obligor certifying that each copy document relating to it specified in this schedule 1 is true and correct, complete and in full force and effect as at a date no earlier than the entry into this Agreement.

7. A duly executed original of a letter from the process agent referred to in clause 13 of the Guarantee Agreement confirming that it has been appointed by the relevant Obligor and that it has accepted such appointment.

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8. A duly executed original of a legal opinion by Morgan Lewis & Bockius LLP, Philadelphia, USA, in respect of the Guarantee Agreement

9. Any other document or evidence the Lender may reasonably require.

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SCHEDULE 2

Form of Utilization Request

From: [Borrower]

To [Lender]

Date:

Ladies and Gentlemen,

1. We hereby request you to make the following transfer:

From our account No.: [    ]

To our account No: [    ]

Amount:

On (value date): [    ]

Interest period : [1/2/6] months

2. We hereby confirm all conditions precedent in connection with such transfer are satisfied as of the date of this request.

3. This request is irrevocable.

Best regards

Zentraleuropa LPG Holding GmbH

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Schedule 3

Mandatory Cost Formulae

1. The Mandatory Cost is an addition to the interest rate to compensate the Lender for the cost of compliance with (a) the new requirements of any national bank (b) in either case, new requirements of any other authority which replaces all or any of its functions, (c) the new requirements of the European Central Bank (in this Clause 1, “new requirements” means requirements introduced and coming into force after the Date of this Agreement).

2. On the first day of each Interest Period (or as soon as possible thereafter) the Lender shall calculate, as a percentage rate, a rate (hereinafter referred to as the “Additional Cost Rate”) in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Lender as a weighted average of the Lender’s Additional Cost Rates and will be expressed as a percentage rate per annum.

3. The Additional Cost Rate for the Lender will be the percentage notified by the Lender as the cost of complying with the minimum reserve requirements of the Austrian National Bank and/or any other authorities referred to in Clause 1 above.

4. Any determination by the Lender pursuant to this schedule 3 in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to the Lender shall, in the absence of manifest error, be conclusive and binding on all parties to this Agreement.

5. The Lender may from time to time, after consultation with the Borrower, determine and notify to the Borrower any amendments which are required to be made to this schedule 3 in order to comply with any change in law, regulation or any requirements from time to time imposed by the Austrian National Bank and/or any other authorities referred to in Clause 1 above, and any such determination shall, in the absence of manifest error, be conclusive and binding on all parties to this Agreement.

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Schedule 4

Ratios; Manner of Calculation

I.) Ratios.

Certain financial ratios of UGI Corporation (on a consolidated basis) (individually a “Ratio” and collectively the “Ratios”) are defined as follows:

Equity Ratio as % of total assets means Total Equity divided by Average Adjusted Total Assets.

Return on Assets means Ordinary Income divided by Average Adjusted Total Assets.

Debt Amortization Period means Net Debt divided by EBTDA.

whereas the meaning of capitalized terms shall be as follows:

TOTAL EQUITY means Total Stockholders’ Equity according to quarterly/annual report plus Minority Interests.

AVERAGE ADJUSTED TOTAL ASSETS means the sum of Total Assets according to quarterly/annual report for each of the past four (4) financial quarters divided by four (4).

ORDINARY INCOME means operating income according to quarterly/annual reports.

EBTDA means Ordinary Income plus Depreciation and Amortization minus Interest Expense.

NET DEBT means Current Maturities of Long Term Debt plus Bank Loans plus Long Term Debt (altogether “INTEREST-BEARING LIABILITIES”) minus Cash and cash equivalents minus Short-term investments.

II.) Manner of Calculating Ratios:

The Ratios shall be calculated by the Lender in accordance with the terms set forth in this schedule 4 on the basis of the consolidated financial statements of UGI Corporation to be provided pursuant to clause 10.1(ii), beginning with the consolidated quarterly financial statements of UGI Corporation for the first calendar quarter of 2006. UGI Corporation may, at its discretion, provide its calculation of such Ratios together with the submission of the financial statements that are required to be submitted pursuant to clause 10.1(ii). For the sake of clarification, however, it is hereby stated that only the calculation by the Lender is relevant for the purpose of this Agreement.

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EX-31.1

EXHIBIT 31.1

CERTIFICATION BY THE CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Lon R. Greenberg, certify that:

1. I have reviewed this interim report on Form 10-Q of UGI Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2006

/s/ Lon R. Greenberg

Lon R. Greenberg

Chairman and

Chief Executive Officer of

UGI Corporation

EX-31.2

EXHIBIT 31.2

CERTIFICATION BY THE CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Anthony J. Mendicino, certify that:

1. I have reviewed this interim report on Form 10-Q of UGI Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2006

/s/ Anthony J. Mendicino

Anthony J. Mendicino

Senior Vice President - Finance and

Chief Financial Officer of

UGI Corporation

EX-32

EXHIBIT 32

Certification by the Chief Executive Officer and Chief Financial Officer

Relating to a Periodic Report Containing Financial Statements

I, Lon R. Greenberg, Chief Executive Officer, and I, Anthony J. Mendicino, Chief Financial Officer, of UGI Corporation, a Pennsylvania corporation (the “Company”), hereby certify that to our knowledge:

(1) The Company’s periodic report on Form 10-Q for the period ended June 30, 2006 (the “Form 10-Q”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

*        *        *

CHIEF EXECUTIVE OFFICER	CHIEF FINANCIAL OFFICER
/s/ Lon R. Greenberg	/s/ Anthony J. Mendicino
Lon R. Greenberg	Anthony J. Mendicino
Date: August 8, 2006	Date: August 8, 2006