UGI CORP /PA/
SELLER'S GUARANTEE DATED FEBRUARY 16, 2001
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<TYPE>EX-10.5
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<FILENAME>w97049exv10w5.txt
<DESCRIPTION>SELLER'S GUARANTEE DATED FEBRUARY 16, 2001
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                                                                    EXHIBIT 10.5

                               SELLER'S GUARANTEE

                         REPRESENTATIONS AND GUARANTEES

BETWEEN THE UNDERSIGNED:

(1)   ELF ANTAR FRANCE, a joint stock company under French law, headquartered at
      24 Cours Michelet, Puteaux (95800), registered with the Registry of
      Commerce and Companies of Nanterre under No. 302 556 832,

      Represented by Mr. Jean-Paul Vettier, acting in his capacity as Managing
      Director of Refinery and Marketing of TotalFinaElf S.A., duly authorized
      for the purposes hereof,

      (hereinafter the "SELLER" or "EAF"),

                                                        PARTY OF THE FIRST PART,

AND

(2)   ELF AQUITAINE, a joint stock company under French law, headquartered 2,
      place de la Coupole, La Defense 6, Courbevoie 92400 and registered with
      the Registry of Commerce and Companies of Nanterre under No. 552 120 784,

      Represented by Mr. Jean-Paul Vettier, acting in his capacity as Managing
      Director of Refinery and Marketing of TotalFinaElf S.A., duly authorized
      for the purposes hereof,

      (hereinafter the "SELLER" or "ELF AQUITAINE")

                                                       PARTY OF THE SECOND PART,

      (EAF and Elf Aquitaine hereinafter jointly referred to as the
      "GUARANTORS")

AND

(3)   AGZ HOLDING, a joint stock company under French law, headquartered at 43,
      avenue de l'Opera, 75002 Paris and which is registered with the Registry
      of Commerce and Companies of Paris under No. 413 765 108,

      Represented by Mr. Herve Couffin, acting in his capacity as Chairman of
      the Board of Directors, duly authorized for the purposes hereof,

      (hereinafter referred to as the "BENEFICIARY")

                                                        PARTY OF THE THIRD PART,

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                                       2

RECITALS:

1.    By decision of February 9, 2000 (the "DECISION"), the European Communities
      Commission (the "EUROPEAN COMMISSION") authorized the merger between TOTAL
      FINA and ELF AQUITAINE.

      To preserve effective, durable competition in the markets concerned, this
      decision was made contingent upon TOTAL FINA ELF's meeting commitments
      concerning the transfer of a certain number of assets related to various
      activities conducted by the Group TotalFinaElf ("TFE")in metropolitan
      France, including the so-called LPG activity.

      This transfer commitment concerns only LPG activities (packaged, small,
      medium and large bulk) in metropolitan France, excluding any other
      activities and more particularly, the interest held by ELF ANTARGAZ in
      affiliates engaging in LPG activities outside metropolitan France and that
      held in companies located in France or abroad, not engaging in LPG
      activities.

2.    EAF holds all of the shares forming the stated capital of ELF ANTARGAZ, a
      joint stock company governed by French law with capital of 25,822,500
      francs, headquartered at 3, place de Saverne ("Les Renardieres" building)
      in Courbevoie (92400), registered with the Registry of Commerce and
      Companies of Nanterre (572 126 043), hereinafter "EAZ").

      EAZ engages directly in the commerce and industry of liquefied petroleum
      gas, and all substitutes therefor and derivatives thereof.

3.    EAZ itself holds interest in other companies or groups.

4.    EAF and Elf Aquitaine hold shares in the associated logistics companies;
      specifically, EAF holds 16.67% of the capital and the voting rights of
      Geogaz Lavera and 44.90% of the capital and voting rights of Geovexin, and
      Elf Aquitaine holds 72% of the capital and the voting rights of Societe
      Bearnaise des Gaz Liquefies (Sobegal).

5.    An exact and complete organizational chart of the sub-group formed by EAZ,
      its affiliates and holdings and the interest held in the associated
      logistics companies appears in ADDENDUM 1 (A).

6.    Pursuant to a private instrument dated as of the day hereof (hereinafter
      the "SPA"), EAF committed to transfer to Beneficiary, which agreed to
      purchase, the full title in all of the shares of capital of EAZ. In
      addition, on the Closing Date, and concurrently to this transfer, the
      Guarantors shall transfer to the Purchaser (or to EAZ in accordance with
      the power of substitution provided for in the SPA) the shares in Geogaz
      Lavera, Geovexin and Sobegal held by the Guarantors (the shares of EAZ,
      Geogaz Lavera, Geovexin, and Sobegal, which are the subject of these
      transfers, being designated hereinafter as the "SHARES").

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NOW, THEREFORE, IT HAS BEEN AGREED AS FOLLOWS:

ARTICLE 1 - REPRESENTATIONS

The Guarantors represent and guarantee the exactness of the following facts as
of this day and the day of transfer of title in the Shares, knowing that the
representations made and the guarantees granted by the Guarantors are considered
essential by the Beneficiary and were determining factors in its consenting to
acquire the EAZ Shares, and directly or indirectly through EAZ, the shares of
GEOGAZ LAVERA, GEOVEXIN and SOBEGAL under the terms of the SPA.

1.1. AFFILIATES AND HOLDINGS

      1.1.1 EAF holds 516,450 shares, i.e., 100% of the capital of Elf Antar
            Gaz.

      1.1.2 EAZ holds the following percentage of the capital and the voting
            rights in the following companies or groups:

            - GIE NORGAL                          52.667%
                                                   33.33% of voting rights

            - RHONE GAZ S.A.                       50.62%
            - SIGAP OUEST SARL                     66.00%
            - WOGEGAL S.A.                        100.00%
            - GAZ EST DISTRIBUTION S.A.           100.00%
            - NORD GPL S.A.                       100.00%

            - GIE FLOREGAZ                         80.00%
                                                   33.33% of voting rights

            - SP de QUEVEN                         50.00%
            - SP BUS PARIS                         50.00%
            - MAISON DU BUTANE                    100.00%
            - LYON DISTRIBUTION GAZ               100.00%

            All these companies and groups are referred to as the "AFFILIATES"
            of EAZ, including the company Midi Pyrenees Gaz, itself a 75%-owned
            affiliate of Wogegal, Dormeau Gaz, which was acquired by Maison du
            Butane in 2000, as well as Sobegal and Geovexin.

            These companies and groups are also referred to individually
            hereinafter either by their corporate name or the abbreviation of
            such corporate name, or by the capitalized words "COMPANY" or the
            "COMPANY CONCERNED" or together with EAZ by the capitalized word the
            "COMPANIES."

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            In addition to its holdings in the Affiliates, pursuant to the
            organizational chart in ADDENDUM 1 (A), EAZ has a minority holding
            in other companies or groups and EAZ holds a minority interest in
            Geogaz Lavera (the said companies and groups being called the
            "HOLDINGS").

            ADDENDUM 1(B) hereto contains the exact and complete list of the
            Companies and the Holdings, and notes their corporate form and
            shareholders.

1.2 CONSTITUTION AND CORPORATE LIFE

      1.2.1 Each Company was regularly constituted and registered, and the
            corporate decisions and the articles of incorporation and amendments
            thereof were adopted, recorded and published pursuant to the law and
            regulations.

      1.2.2 For each Company, corporate books (to wit, for corporations: book of
            minutes of decisions of the board of directors and attendance book
            for the board meetings, share transfer ledger, individual
            shareholder account records; for all Companies: books of minutes of
            stockholders meetings and attendance sheets for shareholder
            meetings) have been regularly kept and are updated with all
            decisions made by their managing bodies and operations that have
            occurred that concern shares and stock.

      1.2.3 The Companies have all authorizations or licenses necessary to
            engage in their activities, all of which are currently valid, it
            being specified that the authorization relating to the operation of
            Geovexin is currently being renewed and that the new authorization
            relating to the operation of Geovexin will not entail compliance
            obligations with a cost superior to 13,800,000 francs. The
            Guarantors do not have any knowledge of any element that may
            motivate the refusal to renew, the suspension, the revocation, the
            withdrawal, or the cancellation of the said authorizations and
            licenses, and thus declare that the administrative decision renewing
            the authorization for the operation of Geovexin will therefore be
            rendered at the latest within nine months of the Closing Date.

      1.2.4 The Companies cannot as stockholder, shareholder, or de facto
            manager or rightfully-appointed manager, present or past, of another
            entity, be made to pay all or part of the debts of said entity.

      1.2.5 None of the Companies is a shareholder of an entity (with the
            exception, for EAZ, of SEP de QUEVEN, SEP BUS PARIS, GIE Norgal, GIE
            Floregaz, GIE GPL Bus, GIE Reflexe GPL, GIE Groupement Technique de
            Citernes) that, given its nature (a partnership (societe en nom
            collectif) or holding company (societe en

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            participation)), could give rise to liability that would exceed the
            amount of the contributions made to the said entity by its
            shareholders.

      1.2.6 The Companies have always abided by the applicable directives, laws,
            regulations, and business practices in France and abroad.

            None of the Companies has committed acts that could be considered to
            engage its criminal liability.

1.3 ANNUAL FINANCIAL STATEMENTS

      1.3.1 Annual financial statements (balance sheet, income statement and
            notes) of EAZ, as at December 31, 1999, as well as the annual
            financial statements of the Affiliates, as at December 31, 1999
            (hereinafter jointly the "FINANCIAL STATEMENTS"), certified by the
            statutory auditors of these Companies and appearing in ADDENDUM 2,
            were prepared pursuant to legal and usual accounting principles and
            the methods presented in the notes thereto, which are in compliance
            with the applicable legal and regulatory provisions, applied
            consistently with the previous years, and giving a truthful,
            complete and honest image of assets and liabilities, as well as of
            the operating results of the Companies as at December 31, 1999.

      1.3.2 The interim financial statements (balance sheet, income statement
            and notes) of EAZ as at June 30, 2000, and appearing in ADDENDUM 2,
            were prepared pursuant to legal and usual accounting principles and
            give a truthful, complete and honest image of assets and
            liabilities, as well as of the operating results of EAZ as at June
            30, 2000.

      1.3.3 [Subject to holdings in so-called international affiliates or assets
            not included in the scope of the sale of EAZ defined by the European
            Commission and mentioned in the recitals, a list of which appears in
            ADDENDUM 3(A), which were transferred by EAZ prior to the change of
            control, all assets appearing in Financial Statements represent,
            subject to the following paragraph, all assets held by the Companies
            and actually exist.

            The assets owned by the Companies also include the fixed assets
            taken up by the new franchisees following the terminations of the
            contracts that intervened after December 31, 1999, referred to in
            Addendum 3(B).

      1.3.4 Aside from the indications arising from all ADDENDA to this
            guarantee agreement, at the end date of the fiscal period covered in
            their respective Financial Statements, the Companies did not have:

            -     Any other debt or legal, contractual, conditional obligation
                  arising from an operation carried out at or prior to the end
                  date

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                                       6

                  of the fiscal period covered in the Financial Statements, in
                  particular, any corporate, fiscal, administrative or social
                  security debt or obligation.

            -     Off-balance sheet commitments, liens, bonds, endorsements,
                  guarantees other than those appearing in ADDENDUM 4.

      1.3.5 The methods for posting to accounts consignments of bottles and
            security deposits for tanks made available to customers appear in
            ADDENDUM 5.

1.4 SHARES OR STOCK

      1.4.1 The indication of the capital of each Company and Holding, number of
            shares or stock issued by each of them and the number of shares held
            by EAZ or the Guarantors appear in ADDENDUM 6. The Guarantors are
            the rightful owners of the Shares.

      1.4.2 The shares or stock of the Companies and of the Holdings are all of
            the same class and give their bearers the same rights and
            obligations. The Shares were validly issued and have been fully
            paid; all of the entries in the share transfer registers of the
            Companies were made on the basis of share transfer orders kept with
            the registers or, as the case may be, on the basis of minutes of
            shareholder meetings. The Shares and the stock or shares of the
            Companies and of the Holdings held directly or indirectly by the
            Companies are not encumbered by any Lien and, subject to legal or
            statutory provisions, especially for GIE and partnerships, are not
            the object of any shareholders or partnership agreements, preemptive
            right or promise, except for Rhone Gaz, Geogaz Lavera and Geovexin,
            a detailed list of which appears in Addendum 7. None of the
            Companies or the Holdings has issued or is bound to issue any other
            shares, stock options, equity warrants or other rights or
            transferable securities that give access to registered capital,
            voting rights or any part whatsoever of the profits of the Companies
            or the Holdings. The Guarantors have not granted any option on the
            Shares.

      1.4.3 The transfer by the Guarantors of the Shares to the Beneficiary does
            not violate any contract or necessitate any consent or
            authorization, with the exception of the prior approval of the
            Beneficiary by the European Communities Commission and the prior
            approval by the Boards of Directors of EAZ, Sobegal, Geogaz Lavera
            and Geovexin (and the preemption right of the shareholders of the
            latter). EAZ is not the object of any proceeding to exclude it from
            economic-interest groups (groupements d'interet economique) included
            in the Affiliates and Holdings and does not run any risk of being
            excluded in particular as a result of the transfer of the Shares
            from the Guarantors to the Beneficiary, except for GIE GPL Bus and
            GIE Operation Reflexe GPL,

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            as to which the change of control of EAZ makes a prior approval
            necessary.

1.5 COLLECTIVE PROCEEDINGS

      The Companies are not the subject of a judgment of temporary suspension of
      prosecution, or court-ordered reorganization or court-ordered liquidation.
      Furthermore, they are not the object of a "procedure d'alerte" [procedure
      enabling an auditor or works council to call for explanations from the
      managers when the economic position of a business appears precarious] or
      amicable settlement nor are they or have they been in a state of
      insolvency.

1.6 FIXED ASSETS

      1.6.1 OWNERSHIP

      The Companies are the owners of assets or rights constituting the
      intangible, tangible and financial assets appearing in their respective
      Financial Statements. They are in normal state of use and maintenance.

      1.6.2 LIENS ON ASSETS

      The assets of the Companies are free of any Lien, other than those
      appearing in ADDENDUM 4.

1.7 REAL PROPERTY ASSETS

      1.7.1 ADDENDUM 8(A) contains the exact and complete list of all the cities
            where the land, buildings or premises owned by the Companies or
            which they occupy or rent (the "PROPERTIES") are located.

      1.7.2 The Properties, owned by the Companies, are in normal state of
            tenant repair and maintenance, are covered by valid, regular
            ownership titles, held by the Companies, and are not subject to any
            Lien. The research required by the applicable regulations regarding
            asbestos were undertaken on each of the Properties and none of the
            Properties needs to undergo asbestos removal work.

            No Property is the subject of an eminent domain expropriation,
            whether partial or full, or of any other administrative measure
            which could noticeably depreciate the value thereof, nor is any
            particular easement likely to interfere with the use of the
            Property.

      1.7.3 The origin of the thirty-year ownership of the Properties held by
            the Companies is in good order. No party except the Companies holds
            any right of occupancy or a lease over any of the Properties,
            subject to what is specified at ADDENDUM 8(B).

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      1.7.4 The Companies have not received any notice of any pending proceeding
            regarding any of the Properties.

      1.7.5 All of the administrative authorizations relative to the occupation
            of the Properties have been procured. There is no pending proceeding
            that is of a nature that would cause the cancellation or withdrawal
            of these authorizations. The validity of these authorizations will
            not be called into question by the transfer of the Shares pursuant
            to the SPA. All of the permits for demolition and construction
            related to the work undertaken on the Properties and the
            certificates of conformity of said work have been obtained and have
            become definitive. The required insurance policies related to this
            work have been subscribed to in accordance with the applicable legal
            provisions and the insurance premiums related to these policies have
            been duly paid.

      1.7.6 The construction permits and the zoning permits related to the
            Properties are either unreserved or subject to conditions that are
            neither personal nor temporary and that were satisfied or fully
            respected and performed.

      1.7.7 There is no reported or potential liability related to a Property
            held or a ground or building previously occupied by any of the
            Companies.

      1.7.8 LEASES

            ADDENDUM 8 (B) contains the list of all of the buildings or premises
            leased or occupied by the Companies.

            The leases to which the Companies are parties (the "LEASES") are
            still valid and are not the object of any dispute; they have not
            been the object of any request for termination, rescission, refusal
            to renew, or notice, except for those mentioned in ADDENDUM 8 (B).

            The Properties occupied by the Companies were not the subject of
            work performed at the Companies' expense unless the necessary
            authorizations and approvals were obtained.

            ADDENDUM 8(C) contains a list of the leasing agreements, and
            indicates the dates on which they took effect, as well as the
            expiration date and the exercise price of the option. Subject to the
            information listed in ADDENDUM 8(C), no leasing agreement with a
            yearly rent in excess of 200,000 French francs binds the Companies.
            The rents have been fully paid. The assets contemplated in these
            leasing contracts are, given their age and their use, in a normal
            state of repair.

            The change-in-control of the Companies does not constitute a motive
            for accelerated repayment or a breach under a Lease or a leasing
            agreement. The Companies have complied with all of the terms and
            conditions of the Leases and the leasing agreements and the
            Companies

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            are entitled to enforce the Leases and leasing agreements according
            to the terms therein; in particular the business conducted on the
            leased premises is authorized by the Leases and leasing agreements.

            All of the authorizations necessary for obtaining the Leases and the
            leasing agreements have been duly obtained.

1.8   STORAGE CAPACITY

      Sogebal, Norgal, Geogaz Lavera, Geovexin, Rhone Gaz and Cobogal are owners
      or have the use of the storage facilities indicated in ADDENDUM 8(D) for
      stocking butane and propane.

      Each of the shareholders of said companies has a valid and irrevocable
      right to use the storage capacity of these companies, as indicated in
      ADDENDUM 8(D). The transfer of the Shares does not impact these rights as
      they are freely transferable with the transfer of ownership of the shares
      in question.

      The Sellers have communicated to the Buyer the entirety of the shareholder
      agreements and other agreements concerning the storage facilities and
      their use by the shareholders of the companies in question.

1.9 INTELLECTUAL AND INDUSTRIAL PROPERTY RIGHTS

      1.9.1 The Companies have full title in the corporate names, signage names,
            commercial names and other distinctive signs used by them and which
            are mentioned in ADDENDUM 9 (A) to this agreement, it being
            specified that the Companies have not acquired by their potential or
            actual use thereof, any right in software programs, names, signage
            names, commercial names and more generally all distinctive signs
            belonging to Elf Aquitaine or to any other companies of the TFE
            Group.

      1.9.2 The Companies hold only those patents and marks, and patent
            concessions or mark licenses, referred to in ADDENDUM 9 (B)
            (hereinafter referred to as "MARKS AND PATENTS").

      1.9.3 Subject to the information noted in ADDENDUM 9 (B) AND ADDENDUM
            9(C), each of the Companies has the exclusive right to use the Marks
            and Patents and the Know-How (collectively referred to as the
            "INTELLECTUAL PROPERTY RIGHTS").

      1.9.4 ADDENDUM 9(C) lists the Intellectual Property Rights belonging to
            the TFE Group companies that are used by the Companies.

      1.9.5 Subject to the provisions of the preceding paragraphs and to
            ADDENDUM 9 (D), the activities conducted by the Companies have not,
            nor do they, infringe any commercial, industrial or intellectual
            property right, and subject to the intellectual property rights
            belonging to third

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            parties referred to in Addendum 9(B) or to companies of the TFE
            Group set forth in ADDENDUM 9(C), the Companies do not use any
            industrial or intellectual property right (in particular, marks,
            patents, models, designs, recipes and know-how), other than those
            belonging to them or belonging to EAZ, and therefore are not liable
            for payment or royalty [payment] made to the Guarantors or any third
            parties.

      1.9.6 No Trademark or Patent is subject to any Lien.

1.10 CURRENT ASSETS

      1.10.1 INVENTORIES AND PRODUCTION IN PROGRESS

            The Companies' inventories and production in progress were posted to
            the books in accordance with the same assessment methods as in
            previous fiscal years, and in accordance with generally accepted
            accounting principles.

            The quality and nature of the production inventory are such that the
            Companies may use or sell them in the normal scope of their
            activities at the prices regularly charged.

      1.10.2 BUTANE AND PROPANE SALES

            The volume (expressed in tons) of butane and propane sold by the
            Companies over the course of the last three fiscal years and until
            September 30, 2000, broken-down by month and by type of product
            (packaged, small bulk, etc.) is set forth in ADDENDUM 9(E). The
            average price at which butane and propane were sold by the Companies
            and the Companies' average purchase price over the same period,
            broken-down by month and product type (packaged, small bulk, etc.)
            are also listed in ADDENDUM 9(E).

      1.10.3 ACCOUNTS RECEIVABLE

            The accounts receivable of the companies not collected and appearing
            in the Financial Statements are certain, liquid, and due and
            payable, or will be on the maturity terms stipulated in writing, or
            have been covered by reserves pursuant to current accounting rules.

1.11 CONTRACTS AND COMMITMENTS

      1.11.1 The Important Contracts are listed in ADDENDUM 10 (A).

            All of the contracts, agreements, and covenants or undertakings to
            which a Company is party are valid and the parties are bound by the
            terms thereof. None of the contracts may be terminated or modified
            or

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             may engage the liability of one of the Companies as a result of the
             transfer of the Shares and in accordance with the SPA.

      1.11.2 The Companies have not executed any covenant, agreement or
             undertaking binding them in an unusual or abnormal manner as
             compared to the normal course of their activity, or that was not
             concluded or that may not be able to be terminated under normal
             conditions, or justified in light of normal or customary business
             practices in the butane and propane industry, or entailing their
             indefinite or joint responsibility, except for those appearing in
             ADDENDUM 10(A), and except for customer contracts. Similarly, with
             the exception of the information contained in ADDENDUM 10(A), there
             is no covenant, agreement or undertaking, written or oral, that
             binds the Companies or from which they benefit, concluded with a
             TFE Group company.

      1.11.3 As of the date hereof, the Companies have not received information
             that a client outside the Total Fina Elf Group, contributing
             significantly to their respective results, would have the intent of
             stopping or reducing their operations substantially, immediately or
             in the future, because of the transfer of the Shares, except as
             indicated in ADDENDUM 10(B).

1.12 INSURANCE

      A list of the insurance policies to which the Companies have subscribed or
      from which they benefit, indicating the name of the insurance company, the
      nature of the risks insured, the term of the policy, their scope and
      deductible amount is set forth in ADDENDUM 11(A).

      All of the property or assets owned by the Companies or that the Companies
      rent or use are validly covered by current insurance policies.

      The premiums related to the insurance policies to which the Companies have
      subscribed or from which they benefit have been paid as required and the
      Companies have carried out all of the formalities and declarations that
      are necessary under the terms of the policies in order to be indemnified.

      There is no litigation underway that relates to [refusal of coverage
      under] a policy and no event has occurred which would cause such a
      litigation. The Companies have not suffered any damage of a nature so as
      to hinder or slow-down the conduct of their activities as they habitually
      do, or so as to cause an increase in the premiums or the deductible.

      An exhaustive list of all claims reported to the insurers over the course
      of the past five years is attached as Addendum 11(B).

1.13 COMPUTERS

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      The computer equipment, the software, the telephone system and other
      communication networks (the "COMPUTER SYSTEMS") are in a normal state of
      repair and can be used for their intended purpose within the scope of the
      current business of the Companies.

      The Companies have undertaken the actions and steps necessary so that the
      Computer Systems can sustain the currency change to the Euro.

1.14 COMPLIANCE WITH ENVIRONMENTAL REGULATIONS

      The Companies comply and have always been in compliance with all
      legislative and regulatory provisions regarding the respect and protection
      of the environment, site cleanliness, safety and hazardous substances
      transportation. They have not been notified of any breach of compliance in
      this regard.

      The Companies comply and have always complied with specific regulations in
      connection with their various activities, in particular the use or storage
      of hazardous products or waste management.

      However, as regards customer storage installations, over which the
      Companies do not have real and permanent control, given that they are
      dispersed throughout the territory, changes liable to be made by clients
      themselves or third parties in the immediate environment of the storage
      tanks, hazards particular to the measurement of the distances to be kept,
      pursuant to current regulations, no guarantee is given concerning
      compliance with the legal or regulatory prescriptions to be observed in
      matters of conformity of these installations, which is accepted by the
      Beneficiary. It is however expressly agreed that in the event of
      occurrence of damage relating to customer storage installations, prior to
      the next triennial servicing which shall be realized by the Companies
      after the Closing Date, which engages the liability of the Companies, the
      guarantee by the Guarantors shall apply. Notwithstanding the Guarantors'
      undertaking, such damage shall be included in the insurance coverage set
      up by EAZ as of the Closing Date under the same terms as those prevailing
      on that date.

1.15 CORPORATE MANDATES - EMPLOYMENT CONTRACTS

      1.15.1 CORPORATE MANDATES

            (a)   The Companies have not granted any employment contract,
                  service contract or special advantage to their directors,
                  chairman or managing directors, except as described in
                  ADDENDUM 12.

            (b)   The Companies have no contractual obligation to their
                  corporate executives or their beneficiaries, in the way of
                  pension, additional retirement or widow pension, stock options
                  or other in-kind benefits, except as listed in ADDENDUM 12.

      1.15.2 EMPLOYMENT CONTRACTS

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            (a)   ADDENDUM 13(A) contains an exact and complete list of all of
                  the employees of each Company and notes their seniority,
                  function, geographic location, current annual remuneration and
                  any particular in-kind bonus or advantage. This list also
                  includes those employees on secondment, those who are on
                  long-term leave and those with temporary contracts as well as
                  those who work part-time, a list of the employment agencies,
                  apprentices and the employees' representative(s).

            (b)   No amount is owed to an employee of any of the Companies under
                  his employment contract, other than the right to compensation
                  accrued but not yet due, or reimbursements of professional
                  expenses.

            (c)   The Companies have not granted any welfare benefit, and have
                  not executed any compensation agreement outside the norms of
                  their business field, and no current or former employee of a
                  Company benefits from special advantages other than those
                  imposed by law, or the applicable collective bargaining
                  agreements or company agreements referred to below.

            (d)   ADDENDUM 13 (B) contains the text of the company and/or profit
                  sharing agreements and the only profit sharing agreements and
                  corporate saving plan in existence. ADDENDUM 13 (B) also sets
                  forth the commitments that the Companies have made vis-a-vis
                  their employees with regard to retirement or disability that
                  grant employees benefits other than those required by law, the
                  collective bargaining agreements or the company agreements.
                  The Companies, which are bound by this requirement, have
                  concluded an agreement for the reduction of work time to a
                  35-hour work week and have implemented this reduction in
                  compliance with the applicable laws and regulations.

            (e)   ADDENDUM 13(C) contains the models of the employment contracts
                  concluded by the Companies. No employment contract concluded
                  by the Companies provides for special clauses (contractual
                  indemnity for dismissal, change-of-control clause, etc.), it
                  being specified that certain salaried guards may under their
                  employment contract benefit from on-site housing.

            (f)   The list of dismissal proceedings or early retirement which
                  are ongoing, as well as the list of dismissals for personal or
                  economic reasons and forced retirement and the list of the
                  settlements concluded since January 1, 2000 appear in ADDENDUM
                  14(A). Only those employees listed in ADDENDUM 14(B) benefit
                  from a rehiring priority. The Companies do not currently have
                  any commitments resulting from settlements concluded with the
                  employees or executive officers.

                  No employment contract has been terminated under conditions
                  for which the Companies could be held liable in any manner
                  whatsoever.

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                                       14

                  It is noted that the Beneficiary is aware of the so-called
                  "Plan Ambition 2001" social plan. The reserves included in the
                  financial statements as of December 31, 2000 for the "Plan
                  Ambition 2001" cover the entirety of the charges and other
                  costs associated with this plan.

                  The Companies are current on their social security,
                  unemployment, and retirement payments, and more generally, any
                  other contribution or payment owed in connection with
                  employment.

                  The Companies have not incurred any liability as a result of
                  work-related accidents, accidents that occurred during transit
                  to or from work on a date prior to the transfer, or as a
                  result of professional illnesses that were declared before the
                  transfer.

                  The Companies are not in violation of the legislation
                  regarding loans of personnel, secondment, non-discrimination,
                  or the regulations regarding the length of the workweek.

                  None of the Companies is the subject of or risks becoming the
                  subject of a specific procedure brought by the competent
                  authorities for non-respect of the labor regulations, in
                  particular, but not limited to, those resulting from recourse
                  to a fixed-term employment contract, employee representation
                  [rules], or cleanliness and safety [rules].

1.16 LAWSUITS - LITIGATION

      There is no request, action, lawsuit or judicial, arbitration, or
      administrative proceeding (tax related or otherwise) currently pending
      against the Companies or affecting them, their assets or business in which
      they are parties, involving or that could result in a claim for an amount
      in excess of 200,000 francs, except as mentioned in ADDENDUM 15 or in
      Section 1.17 hereafter. The claims in principal below 200,000 francs do
      not cumulatively exceed 1,000,000 francs.

      These requests and proceedings are entirely covered by insurance policies
      or are adequately reserved for in the Financial Statements. None of them
      is likely to have an adverse impact on the transactions set forth in the
      SPA or this agreement, or on the Guarantors' performance of their
      obligations under these agreements.

      No Company is the subject of an investigation, a verification, a control,
      or procedure or injunction, other than those referred to in Section 1.17
      hereafter, undertaken by any authority, and no notification or injunction,
      other than those referred to in Section 1.17 hereafter, has been received
      by the Companies from any authority, except as mentioned in ADDENDUM 15 or
      in Section 1.17 hereafter.

      All of the products sold or put at the Companies' disposal have been and
      are fit for normal use by those making use thereof. None of these products
      is defective or unfit for normal use, such that the Companies would incur
      liability.

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                                       15

1.17 TAX, SOCIAL AND CUSTOMS DECLARATIONS

      1.17.1 Until the Closing Date hereunder, the Companies have regularly and
             duly met their tax, social and customs obligations and are current
             on all Taxes owed.

      1.17.2 Subject to the provisions of ADDENDUM 16(A), no notice or warning
             was received by the Companies, and no tax, social or customs
             proceeding is pending to date.

      1.17.3 Except for transactions placed under the tax regime set forth in
             articles 210A and 210B of the General Tax Code, none of the
             Companies benefits from deferred or suspended Tax payments either
             in application of the law or an agreement with the competent
             authority or a request made to this effect with said authority. The
             transactions placed under the tax regime set forth in articles 210A
             and 210B of the General Tax Code undertaken by the Companies are
             listed in ADDENDUM 16(B).

             The Companies are integrated into the fiscal group formed by TFE.
             The exit of the Companies from the fiscal group formed by TFE will
             not have any impact on the results or the tax liability of the
             Companies, it being specified however, that in accordance with
             articles 223A et seq. of the General Tax Code:

             -     the tax losses (including long-term capital losses) realized
                   by the Companies during their consolidation period under TFE
                   or Elf Aquitaine will not be carried forward against their
                   own results realized after their exit from the consolidation;

             -     and tax profits (including long-term capital gains) realized
                   during this period cannot be distributed free of equalization
                   tax ("precomptee") and cannot be offset against potential
                   future losses which would be carried back by the Companies
                   after their exit from consolidation.

1.18 RELATIONS WITH THE TFE GROUP

      With the exception of that which is mentioned in ADDENDUM 17, the
      Companies and the Holdings together represent the entirety of the butane
      and propane sales activity of the Elf Group (i.e., Elf Aquitaine and its
      subsidiaries) in metropolitan France (and in the principality of Andorra)
      and of the associated logistics. ADDENDUM 17 describes the relations with
      the TFE Group (services of an administrative nature, common services,
      etc.) since January 1, 2000. In particular, with the exception of that
      which is mentioned in ADDENDUM 17:

      -      from the consummation of the transfers contemplated in the SPA, the
             Beneficiary shall be the owner of all of the assets and rights
             necessary to continue the propane

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                                       16

            and butane business of the Elf Group in metropolitan France as it is
            carried out today;

      -     all of the employees of the Companies are exclusively involved in
            the propane and butane distribution activity of the Companies (as
            the purpose of the scope of the transfer) and no Elf Group employee
            who devotes a significant part of his or her time to said activity
            (not counting supplies) will not be an employee of one of the
            Companies, except for seconded personnel as indicated in ADDENDUM
            17.

1.19 HOLDINGS

      Only the representations appearing in Sections 1.1 ("Affiliates and
      Holdings"), 1.4 ("Shares or Stock") and 1.8 ("Storage Capacity"), apply to
      the Holdings.

      However, the Guarantors represent that they are not aware of any element
      or fact that would render false or inaccurate any of the above
      representations if it were made with regard to the Holdings; it being
      specified that this representation does not create an obligation for the
      Guarantors to conduct prior research or diligence.

1.20 ACCURATE AND TRUE CHARACTER OF THE REPRESENTATIONS

      All of the representations made by the Guarantors, all of the information
      contained in the Addenda to which these representations make reference and
      all information provided in the Data Room are exact, accurate and true and
      do not omit any facts that are important or unfavorable to any of the
      Companies or Holdings.

1.21 KNOWLEDGE OF THE GUARANTOR

      With the exception of the representations that are expressly made to the
      knowledge of the Guarantors, the Guarantors may not use their ignorance as
      to the inaccurate character of a representation as a defense against the
      Beneficiary, even if such an inaccuracy could not have been known by the
      Guarantors.

1.22 EXEMPTIVE CHARACTER OF THE ADDENDA

      The Guarantors are not required to provide the indemnification provided
      under Article 2.1(a) relative to a representation for facts specifically
      mentioned in the ADDENDA. For purposes of clarification, it is specified
      that the Guarantors are not released from their obligation to indemnify
      the Beneficiary except (i) as to only those facts mentioned in the ADDENDA
      in an explicit and unequivocal manner that permit the Beneficiary to
      estimate as it sees fit, the damage or the loss or the risk of damage or
      loss, and (ii) inasmuch as this mention appears in the ADDENDUM referred
      to by the representation in question.

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                                       17

ARTICLE 2 - GUARANTEE

2.1 PURPOSE OF THE GUARANTEE

2.1.1 GENERAL GUARANTEES

      The Guarantors jointly and severally declare and guarantee that they will
      indemnify the Beneficiary or, in accordance with Article 2.3, EAZ, for:

      (a)   the amount of any damage, loss, interest, and/or penalty suffered by
            the Beneficiary or one of the Companies as a result of inaccuracy or
            omission concerning any of the representations in Article 1 above;

      (b)   the amount of any liabilities of the Companies or any one of them,
            known or unknown as of the end date of the fiscal period covered in
            the 2000 Financial Statements, originating from or caused by an
            event, fact, or operation prior to the date on which the 2000
            Financial Statements were prepared and that were not reserved or
            sufficiently reserved for in the 2000 financial statements [sic];
            and

      (c)   the amount of any Tax that is borne by the Beneficiary or one of the
            Companies and any tax benefit (in particular tax credits or another
            reporting or deferred tax regime) that is called into question,
            following a reassessment or other administrative action (prior to or
            following the Closing Date) concerning a period prior to the Closing
            Date; for the period following December 31, 2000, and prior to the
            Closing Date, the Guarantors are nonetheless held hereunder only
            insofar as the reassessment or administrative action mentioned above
            does not originate in negligence, a mistake or an omission of the
            Beneficiary and/or EAZ or the Subsidiaries, following the Closing
            Date (notably compliance with obligations for such period);

      to which will be added certain expenses and costs (including fees of
      auditors, lawyers, or counsel) borne by the Beneficiary and/or one of the
      Companies due to the act or the event described hereabove.

      It is specified here that, except in the event of a calling into question
      by the administrative authority in the context of the fiscal guarantee
      referred in (c) above, the methods for booking consignments of bottles and
      security deposits on tanks described in ADDENDUM 5 are known to the
      Beneficiary and accepted by it, and therefore may not lead to the
      implementation of this guarantee.

2.1.2 SPECIFIC GUARANTEES

      (a)   NORGAL

            The Guarantors, having informed the Beneficiary of the necessity of
            beginning consolidation work in 2003 on the two storage tanks at the
            Norgal site,

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                                       18

            represent to the Beneficiary that the budget for completion of the
            work, should they appear necessary following an injunction from the
            Regulated Facilities Inspector, would not exceed 18 million francs,
            subject to a possible 10% variation, for each storage tank.

            The Guarantors undertake to repay the Beneficiary 80% of any amount
            in excess of the 18m franc budget (subject to a 10% variation),
            prorata to the interest held by EAZ in GIE Norgal on the date of
            reception of the work; it being specified that (i) the provisions of
            the first paragraph of Article 2.2. hereafter are not applicable and
            (ii) the deductible and cap set in Articles 2.5 and 2.6 hereafter
            are not applicable.

            This guarantee is granted for a duration of five (5) years; it shall
            be applied if, prior to the expiration of such period, Norgal
            decides to implement the works mentioned above or the Regulated
            Facilities Inspector addresses an explicit request under the terms
            described above, to the exclusion of any site reconstruction.

      (b)   The Clean-Up of the Grounds and Under Grounds

            The Guarantors shall indemnify the Beneficiary for the amount of any
            payment or charge borne by the Companies in order to clean up the
            grounds and undergrounds used, or which have been used, by the
            Companies for every pollution of such lands existing on the Closing
            Date, it being specified that the indemnification shall only be owed
            if the clean-up work is required by the competent authorities, and
            within the limit of such a requirement, and only as to the existing
            pollution concerned as of the Closing Date.

      (c)   Assets outside the scope [of the acquisition]

            The transfer of the international assets and restructuring
            operations, beyond the scope of the transfer defined in the SPA, are
            described in ADDENDUM 18. The Guarantors shall indemnify the
            Beneficiary for the amount of any damage, loss, liability and cost
            associated with the assets outside the scope [of the acquisition]
            and the transfer thereof, as well as with the Subsidiaries in
            Liquidation. The provisions of article 2.2 ("Scope of the
            Guarantee"), except for the last paragraph thereof, do not apply to
            this indemnification.

            The threshold, deductible and cap set at articles 2.4, 2.5 and 2.6
            hereafter are not applicable.

      (d)   Business tax

            The Guarantors informed the Beneficiary of the receipt by EAZ of
            letters of information addressed to the tax authorities on November
            10, 2000 and December 27, 2000 relative to business tax due for
            1997, 1998, 1999 and 2000 and of EAZ's request for a suspension of
            payment of the corresponding reassessments, for which a payment
            request was issued on February 15, 2001;

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                                       19

            the Guarantors have been responsible for remitting to the tax
            authorities, with a view to obtaining such a payment suspension, any
            bank guarantee or other guarantee for the amounts being reassessed,
            without the possibility for any claim or request to be made against
            EAZ on the basis of such guarantees.

            The Guarantors shall indemnify the Beneficiary franc by franc for
            any payment due by EAZ for business tax reassessment by reason of
            the tangible fixed assets referred to by the tax authorities in the
            letters mentioned above which would be due by EAZ pursuant to the
            filings made until the financial year closed on December 31, 2000.

            In order to determine the amount of the indemnification potentially
            due under this article, articles 2.4 and 2.5 relative to the
            threshold and the deductible shall not be applied, and no setoff
            with existing reserves shall be made notwithstanding the provisions
            of the second paragraph of article 2.2.

            The Beneficiary guarantees that the Company concerned shall, absent
            contrary advice from the Guarantors, request a suspension for the
            payment of any reassessed amounts, subject to the condition that the
            Guarantors remit to the tax authorities any bank guarantee or other
            guarantee for the amounts being reassessed, without the possibility
            for any claim or request to be made against EAZ on the basis of such
            guarantees.

      (e)   Geovexin

            The Parties agree that if:

            -     the tax authorities have not delivered a decision of renewal
            of the authorization of operation of Geovexin six months after the
            Closing Date, and, should Geovexin cease to operate, following an
            administrative or a court decision made as a consequence of such
            non-renewal, the Beneficiary shall be entitled to claim from the
            Guarantors, as an indemnity, a lump sum of one (1) million francs
            per month. This undertaking of the Guarantors shall begin to run on
            the expiration of the third year following the Closing Date; the
            indemnity due hereunder shall be deducted from any amount due under
            2.1.1(a) concerning the declarations related to Geovexin in
            [section] 1.2.3 hereabove;

            -     the authorities should refuse the renewal of such an
            authorization of operation or should not deliver this renewal upon
            the expiration of the third year following the Closing Date, the
            Parties would promptly confer to organize among themselves the
            retrocession to Elf Antar France (or any entity that it would
            substitute therefor) of EAZ's interest in the capital of Geovexin
            (acquired by EAF pursuant to the SPA) for a price equal to the
            acquisition price referred to in the SPA.

            The deductible and the cap set in articles 2.5 and 2.6 hereafter are
            not applicable.

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                                       20

2.2 SCOPE OF THE GUARANTEE

      It is expressly agreed, concerning those Holdings and Subsidiaries (except
      for SIGAP Ouest SARL and GIE Floregaz) in which any party other than the
      Guarantors or EAZ directly or indirectly holds an interest prior to the
      transfer of the Shares, that the portion of the damage suffered by these
      Holdings and Subsidiaries that must be paid back by the Guarantors to
      Beneficiary will be proportionately limited to the shareholding of the
      Guarantors or EAZ in the capital of said Holdings and Subsidiaries.

      If the damage or loss which we will be indemnified was specially reserved
      for in the 2000 Financial Statements, the Beneficiary or EAZ, in
      accordance with Article 2.3, will be indemnified by the Guarantors only
      [for the amount] in excess of the reserved amount.

      If the costs of social restructuring are inferior to the reserve booked as
      of December 31, 2000 as the "2001 Ambition Plan," the difference shall be
      deducted from any amount due by the Guarantors hereunder.

      Any partial indemnity that would be paid by an insurance company will be
      deducted from the amounts possibly owed by the Guarantors under the
      conditions hereof. If the indemnity is paid by an insurance company after
      payment to the Beneficiary or, in accordance with Article 2.3, to EAZ by
      the Guarantors in accordance herewith, the Beneficiaries or, as
      applicable, EAZ will pay the Guarantors the amounts thus received by the
      beneficiary of the insurance policy, up to the amount of the payment made
      by the Guarantors and after deduction of all costs and expenses
      corresponding to this indemnity (including the increase of the premiums or
      the deductible resulting from the damage which is the subject of the
      indemnification). The Beneficiary will enclose with its request for
      payment sent to the Guarantors a notice of information regarding the
      insurance company insuring the generating factor of the guaranty and
      regarding the opening of a damage file by the insurer. The Guarantors
      shall be promptly informed by the Beneficiary or the insurance company of
      payment of the indemnification by the insurance company. The amount of
      indemnification due to the Guarantors will be paid to them by the
      Beneficiary within fifteen (15) days following payment of indemnification
      by the insurance company.

      As a general matter, when the liability giving rise to an indemnification
      of the Beneficiary or, in accordance with Article 2.3, of EAZ by the
      Guarantors is reduced or recovered from a third party, after the date on
      which the Beneficiary or EAZ was indemnified by the Guarantors, the
      Beneficiary or, as applicable, EAZ shall pay to the Guarantors the amounts
      thus recovered from a third party (up to the indemnified liability) and
      after deduction of all costs and expenses corresponding to this
      indemnification and minus the tax corresponding to this indemnification.
      To this end, the Beneficiary or, as applicable, EAZ shall diligently
      pursue all recourse against a third party in order to avoid or reduce the
      liability giving rise to indemnification.

<PAGE>
                                       21

      The actual tax savings (excluding any creation of or increase in a tax
      loss) recorded by the Companies concerned by reason of the loss giving
      rise to indemnification will be deducted from the amount of the indemnity
      owed by the Guarantors to the Beneficiary or, in accordance with Article
      2.3, to EAZ.

      Any tax assessment constituting a mere displacement in time of the
      corresponding charge (for example, amortization reversal) will be retained
      only at the cost of increases, penalties and financial charges resulting
      therefrom, and consequently exclude the principal actually re-obtained
      thereafter by the reinstatement of the contested deductions.

      The Guarantors and the Beneficiary acknowledge that any payment effected
      by the Guarantors pursuant to articles 2.1.1 and 2.1.2 above will be
      characterized as a reduction of the Definitive Price of EAZ Shares or the
      price of the shares of the associated logistics companies, as the case may
      be; it will be characterized as an indemnity for any payment in excess of
      the Definitive Price of the EAZ Shares or the price of the shares of the
      associated logistics companies, without prejudice to the application of
      the Global Cap set at article 2.6 hereafter.

2.3 ENGAGEMENT FOR THE BENEFIT OF A THIRD PARTY

      If EAZ acquires the shares of Geogaz Lavera, Geovexin, and Sobegal owned
      by the Guarantors in accordance with the power of substitution provided in
      the SPA, the amount of any indemnification due by the Guarantors in
      accordance with this Guaranty Agreement and relating to one of the
      Companies will be paid to EAZ. This provision is deemed to be an
      engagement for the benefit of a third party.

2.4 THRESHOLD FOR IMPLEMENTATION OF THE GUARANTEE

      It is agreed that this Guarantee may not be implemented other than for
      claims in excess of 250,000 French francs, with the exception nonetheless
      of claims relative to the commercial debts and claims of which the nature,
      the purpose, or the cause is similar and which would therefore be counted
      cumulatively. No indemnification will be owed by the Guarantors for any
      claim made by the Beneficiary for an amount that does not meet this
      threshold (except for those exceptions mentioned above).

      This threshold does not apply to the special guarantees provided for in
      articles 2.1.2(c) ("Assets outside the scope [of the acquisition]" and
      2.1.2(b) (sic) ("Business Tax").

      This threshold does not apply either to damages due as a result of
      damaging events that occurred with the knowledge of management and/or of
      the insurance manager of EAZ or of the Insured Subsidiaries prior to the
      Closing Date, which have not given rise to a third party claim prior to
      the Closing Date referred to in article 10.2 of the SPA.

2.5 DEDUCTIBLE

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                                       22

      The Guarantors will be required to pay to the Beneficiary the amount of
      the indemnification possibly owed under this Guarantee only after
      deduction of a deductible in an amount of 30,000,000 FF. Beyond this
      deductible, the Guarantors must pay the Beneficiary any amounts owed
      hereunder as from the first franc.

      This deductible does not apply to the special guarantees provided in
      article 2.1.2(a) ("Norgal"), in article 2.1.2(c)("Assets outside the scope
      [of the acquisition]" and in article 2.1.2(b) (sic) ("Business tax") and
      article 2.1.2(e)("Geovexin").

      This deductible does not apply either to damages due as a result of
      damaging events that occurred with the knowledge of management and/or of
      the insurance manager of EAZ or of the Insured Subsidiaries prior to the
      Closing Date, which have not given rise to a third party claim prior to
      the Closing Date referred to in article 10.2 of the SPA.

2.6 CAP ON THE GUARANTEE

      The total sum of the amounts which the Guarantor may owe to the
      Beneficiary hereunder, is capped at 20% of the Definitive Price of EAZ
      shares and of the Price of the Shares of the Associated Logistics (the
      "GLOBAL CAP").

      This cap does not apply to the special guarantees provided in article
      2.1.2(a) ("Norgal"), in article 2.1.2(c) ("Assets outside the scope [of
      the acquisition]" and in article 2.1.2(e) ("Geovexin").

      This cap does not apply either to damages due as a result of damaging
      events that occurred with the knowledge of management and/or of the
      insurance manager of EAZ or of the Insured Subsidiaries prior to the
      Closing Date, which have not given rise to a third party claim prior to
      the Closing Date referred to in article 10.2 of the SPA.

2.7 TERM OF THE GUARANTEE

      The Beneficiary's claims shall be presented for the first time within the
      first twenty-eight (28) months following the Closing Date. After the
      expiration of this term, the Guarantors will be released from their
      contractual guarantee obligations for any new claims.

      However,

      -     the Beneficiary's claims will be admissible concerning all tax,
            customs or social assessments until the thirtieth (30th) day
            following the expiration of the statute of limitations applicable to
            the recourse taken by the authority concerned;

      -     the Beneficiary's claims that are relative to

      (i) the inaccurate character of the representations in Article 1.14
      ("Compliance with Environmental Regulations"),

<PAGE>
                                       23

      (ii) the specific guarantees of Article 2.1.2(a) ("Norgal"), 2.1.2(b)
      ("Clean-up of the grounds") and 2.1.2(c) ("Assets outside the scope [of
      the acquisition] and

      (iii) the damages due as a result of damaging events that occurred with
      the knowledge of management and/or of the insurance manager of EAZ or of
      the Insured Subsidiaries prior to the Closing Date, which have not given
      rise to a third party claim prior to the Closing Date referred to in
      article 10.2 of the SPA,

      must be presented for the first time within five (5) years following the
      Closing Date.

      -     The Beneficiary's claims under the special "Geovexin" guaranty
            referred to in article 2.1.2(e) relating to indemnification linked
            to the interruption of operations may be validly asserted within
            three years of the Closing Date.

2.8 REPORTING TO THE GUARANTORS AND METHODS OF IMPLEMENTATION OF THE GUARANTEE

      The Beneficiary must promptly report to the Guarantors any fact brought to
      its attention with regard to which the Beneficiary cannot reasonably claim
      to be unaware that the fact could cause the Guarantee to be implemented.
      However, this time period is fixed at (10) days from the date of
      communication to the Company of any lawsuits filed, summons delivered, or
      claims received from tax, social, or customs administrations, or
      assessment notices.

      Such reporting is not equivalent to a claim made under the Guarantee,
      which may take place only by registered letter with return receipt
      requested, including all information or justifications of the merits of
      the claim under the Guarantee available on that date.

      Except in the event that compliance with the ten-day period is required,
      or for reorganizations based on Business tax, which is the subject of the
      special guarantee referred to in article 2.1.2(d), the failure to inform
      the Guarantors in accordance with the conditions listed above does not
      exonerate the Guarantors from their obligations under a claim, unless they
      can legitimately show that such default prevented them from duly asserting
      their rights in accordance with Article 2.9 in order to avoid or limit the
      damage suffered (in which case the Guarantors would only be relieved of
      their obligation to indemnify the Beneficiary under the claim in question
      up to the amount of the damage suffered as a result of said failure).

2.9 MANDATORY CONSULTATION WITH GUARANTOR

      The Beneficiary or Companies concerned, for which the Beneficiary answers,
      will involve the Guarantors or will propose to involve them, from the
      beginning, in any decision, negotiation, proceeding or pending court
      action liable to affect this Guarantee.

      The Beneficiary, on its own behalf, as well as on behalf of the Companies
      for which it answers, consequently pledges to inform the Guarantors of
      every settlement proposed with an authority or a third party. The
      Guarantors shall, within fifteen (15) days of

<PAGE>
                                       24

      having received this information, indicate to the Beneficiary whether they
      accept or oppose the proposed settlement (it being specified that the
      Guarantors will not be entitled to unreasonably refuse the proposed
      settlement and that no response within the aforementioned time period is
      equivalent to acceptance by the Guarantors). In the event that the
      Guarantors inform the Beneficiary that they oppose the settlement, the
      Beneficiary will lose its right to be indemnified by the Guarantors for
      the amount of any settlement it agrees to that the Guarantors have
      opposed. In the specific case of the guaranty granted with regard to
      business tax in 2.1.2(d), the Guarantors will be entitled to oppose any
      settlement proposed by the Beneficiary if they do not approve the
      principle or the terms thereof; however, the Guarantors' lack of response
      within a twenty (20) day time period as of the receipt of the project will
      be equivalent to the Guarantors' acceptance.

      The Guarantors, or any professionals appointed by them for this purpose,
      will have the option, if they so wish, to ask to consult all documents
      necessary for the defense of their interests, provided, however, that they
      respect the confidentiality of the information provided. The Guarantors
      may also designate, if they so wish and at their exclusive expense, a
      proxy in charge of following-up on all discussions and, if appropriate,
      all proceedings between a Company and the authorities or a third party.

      Such proxy is authorized to express his viewpoint to the Beneficiary or
      the Company concerned, as to said discussions and proceedings.

      The Beneficiary will cause the Companies concerned to defend in good faith
      all lawsuits to which they are a party. The Beneficiary pledges to
      cooperate in good faith with the Guarantors, giving them all information
      and documents necessary for the defense of their interests.

ARTICLE 3 - PAYMENT TO THE BENEFICIARY OR EAZ - PRICE REDUCTION

The Guarantors pledge to pay all or part of the amounts owed under Article 2 to
the Beneficiary as a reduction in the price paid for the acquisition of EAZ
shares or in accordance with Article 2.3 to EAZ as a reduction in the price paid
for the acquisition of shares in Geogaz Lavera, Geovexin, and Sobegal (or, as
the case may be, as an indemnity, in accordance with article 2.2., last
paragraph), subject to the terms of article 2.7.

The amounts claimed must be paid according to the following schedule:

(a)   if the claim was made by reason of a claim of a third party and is in
      connection with the payment of a sum of money to a third party, the
      payment must be made within eight (8) days following the date on which the
      payment in question became due and payable, it being specified that if a
      payment term is granted, the payment of claimed sums must be made when the
      payment term expires;

(b)   for all other claims, within eight (8) days of the date on which the
      indemnifiable damage, the loss or the liability, becomes due and payable,
      or for all damage, losses, and liabilities that are not due and payable,
      is definitely determined.

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                                       25

ARTICLE 4 - DELEGATION

The Beneficiary may, by any means whatsoever (delegation, transfer of
receivables, etc.) pledge all or part of the proceeds from this Guarantee only
in favor of any credit establishment or other lender or bondholder (obligataire)
participating directly or indirectly in the financing or the refinancing of the
acquisition of the Shares and in the refinancing of the debts of the EAZ group.
The Guarantors accept hereby to be party to any instrument (delegation, etc.)
presented by the Beneficiary in order to use, within those limits, as collateral
in whole or in part the proceeds of this Guarantee Agreement.

ARTICLE 5 - RESTRUCTURING

The merger between the Beneficiary and EAZ will not affect the Guarantees (the
company resulting from such merger becoming itself the Beneficiary for the
purposes of this Guarantee).

ARTICLE 6 - NOTIFICATIONS

All notifications, requests, warnings and other communications set forth in this
agreement must be made by letter remitted against a receipt signed by the
addressee, by registered letter with return receipt requested, or by fax
confirmed within eight (8) days by registered letter with return receipt
requested, to the address of the parties first indicated herein, or to any other
address subsequently communicated by the parties pursuant to this article.

The notifications sent will be considered received by the addressee as of the
date of the reception of the receipt or the date of the first attempted delivery
of letters sent with return receipt requested.

ARTICLE 7 - TITLES

The titles of the articles, paragraphs and addenda of this Guarantee Agreement
have been inserted to facilitate the reading hereof; they do not have any legal
impact and cannot be used when interpreting the meaning hereof. In particular,
the representations in Article 1 must be interpreted with regard to their
content without their impact being limited by the title of the article or
paragraph used to present it.

ARTICLE 8 - REPRESENTATIVE

EAF hereby designates Elf Aquitaine, which accepts to act as common
representative (the "REPRESENTATIVE") for the purpose of exercising in its name
and on its behalf all rights and obligations of EAF, any decision of the
Representative binding EAF. Therefore, and without this list being considered
exhaustive, the Representative will send and receive all

<PAGE>
                                       26

notifications, give all agreements, conclude, extend all deadlines, make all
offers, withdraw, [and] negotiate on its behalf and on behalf of EAF.

Thus, the Representative will be the only interlocutor of the Beneficiary for
the purposes of this Guarantee Agreement.

If this representation is terminated for any reason whatsoever, the Guarantors
should notify the Beneficiary of this event in order for it to be enforceable
against the latter.

ARTICLE 9 - ADDENDA

The Addenda are drawn up in as many originals as there are parties to this
instrument. They are initialed by the undersigned and are an integral part of
this agreement.

ARTICLE 10- ELECTION OF DOMICILE

The Guarantors elect domicile at their headquarters, as first indicated herein,
and the Beneficiary elects domicile at its headquarters, also as first indicated
herein.

Each of the parties may change its elected domicile by communicating its new
address to the other parties, pursuant to the notification rules above, which
change will become effective ten days after receipt of said notification.

ARTICLE 11 - JURISDICTION AND CHOICE OF LAW

This guarantee agreement is governed by French law. The Commercial Court of
Paris will have exclusive jurisdiction over all disputes arising out of this
Agreement.

Done in Paris
In three (3) originals
On February 16, 2001

FOR GUARANTORS                                               FOR BENEFICIARY

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                                       27

                                   ADDENDUM A

                                   DEFINITIONS

In this Guarantee Agreement, the following expressions have the meaning given
below:

"2000 Financial Statements"   means the annual financial statements of the
                              Companies as prepared jointly in accordance with
                              the terms of the SPA.

"Important Contracts"         refers to the contracts, covenants, agreements or
                              engagements, written or oral

                              - with a term greater than 12 months;

                              - of which the termination or the renewal requires
                                a notice of more than 6 months;

                              - that provide for a termination indemnity greater
                                than 1,000,000 FF;

                              - that are considered (or may be considered)
                                agency contracts;

                              - that entail a yearly payment of amounts in
                                excess of 10,000,000 FF or the realization of a
                                turnover in excess of 10,000,000 FF;

                              - that include a security, endorsement, guarantee,
                                indemnity (including a guarantee of debts)
                                granted by one Company to another entity
                                (including an Elf Group company, but not
                                including one of the other Companies), in an
                                amount greater than 5,000,000;

                              - related to the storage capacity rights, the use
                                and transfer thereof;

                              - concerning any pact or other shareholders'
                                agreement.

"Closing Date"                has the meaning given in the SPA.

"Insured Subsidiaries"        has the meaning given in the SPA.

"Taxes"                       means all taxes, value added tax, business tax,
                              and others, taxes, duties, contributions, fees,
                              and withholding (whether it be fiscal,
                              para-fiscal, customs, social security,
                              unemployment, retirement or others), and any
                              penalty, interest and other costs related thereto.

"Definitive Price of the EAZ
Shares"                       has the meaning given in the SPA.

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                                       28

"Definitive Price of the
Associated Logistics Shares"  has the meaning given in the SPA.

"Know-How"                    means the entirety of the confidential technical
                              and business knowledge and in particular studies,
                              technical and scientific files, reports and expert
                              reports.

"Lien"                        means any surety, pledge, mortgage, title or any
                              other surety, non-transferability clause, purchase
                              option, preemption, pre-approval right, seller's
                              lien (except retention of title clauses relating
                              to circulation of assets and those granted in the
                              ordinary course of business of the Companies) or
                              any other restriction to the full availability of
                              the asset in question or its transfer.

</TEXT>
</DOCUMENT>
