Execution Version

AMENDMENT NUMBER TWO
TO LOAN AGREEMENT
 
This AMENDMENT NUMBER TWO TO LOAN AGREEMENT (this “Agreement”), dated as of
February 22, 2008, among MACQUARIE DISTRICT ENERGY, INC., a Delaware corporation
(the ”Borrower”); the several banks and other financial institutions signatories
hereto; LASALLE BANK NATIONAL ASSOCIATION, as Issuing Bank (in such capacity,
the “Issuing Bank”); and DRESDNER BANK AG NEW YORK BRANCH, as Administrative
Agent (in such capacity, the “Administrative Agent”).
 
RECITALS
 
A. The parties hereto are parties to the Loan Agreement dated as of September
21, 2007 by and among the Borrower, the several banks and other financial
institutions from time to time parties thereto as lenders (the “Lenders”), the
Issuing Bank and the Administrative Agent, as amended by Amendment Number One,
dated December 21, 2007 (collectively, the “Loan Agreement”), pursuant to which
the Lenders have agreed to provide certain loans to the Borrower for the
purposes and upon the terms and conditions set forth therein.
 
B. The Borrower and the Lenders have agreed to amend (i) the mandatory
prepayment provisions contained in Sections 2.9(c)(vi) and 2.9(c)(viii) of the
Loan Agreement, together with such conforming changes as may be necessary and
(ii) certain Forms of Borrowing Requests contained in Exhibits A-2 and A-3 of
the Loan Agreement, as set forth herein.
 
NOW THEREFORE, the parties hereto hereby agree as follows:
 
Section 1. Definitions and Rules of Interpretation. All capitalized terms used
but not defined in this Agreement shall have the respective meanings specified
in the Loan Agreement. The rules of interpretation set forth in Section 1 of the
Loan Agreement shall apply to this Agreement, mutatis mutandis, as if set forth
herein.
 
Section 2. Amendment to Loan Agreement.
 
a. The mandatory prepayment provision in Section 2.9(c)(vi) of the Loan
Agreement is hereby deleted and replaced in its entirety with the following:
 
“Commencing on the Calculation Date following the fifth anniversary of the
Effective Date and on each subsequent Calculation Date, the Borrower shall,
promptly and, in any event, no later than ten (10) Business Days following each
such Calculation Date, prepay the Loans with 100% of Excess Cash Flow.”
 

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b. The definition of “Revised Base Case Projections” in Section 1.1 of the Loan
Agreement is hereby deleted and replaced in its entirety with the following:
 
“Revised Base Case Projections” means, updated Base Case Projections, reflecting
any changes thereto as a consequence of the Revised Use Agreement Termination
Date.
 
c. The definition of “Revised Use Agreement Termination Date” in Section 1.1 of
the Loan Agreement is hereby deleted and replaced in its entirety with the
following:
 
“Revised Use Agreement Termination Date” means, the date to which the term of
the Use Agreement is extended beyond December 31, 2020, if such extension
occurs.
 
d. The mandatory prepayment provision in Section 2.9(c)(viii) of the Loan
Agreement is hereby deleted and replaced in its entirety with the following:
 
“If during any fiscal year of the Borrower, the amount of Net Contract
Termination Proceeds for such fiscal year exceeds $1,000,000, the Borrower
shall, promptly after the contract termination, cancellation or non-renewal
which results in such an excess or an increase in such an excess, prepay the
Loans in an amount equal to 100% of the Net Contract Termination Proceeds for
such fiscal year. The Borrower shall not be obligated to make a prepayment under
this Section 2.9(c)(viii) if and to the extent that
 
(A) no Lock-Up Period is in effect,
 
(B) the Borrower makes a representation in writing to the Administrative Agent
at the time the relevant Loan Party or Subsidiary receives such Net Contract
Termination Proceeds that it or another Loan Party intends to reinvest such
proceeds (1) within the same line of business which the relevant Loan Party is
currently engaged, (2) within the United States of America, and (3) exclusively
in Growth Capital Expenditures; and
 
(C) the Borrower makes a representation in writing to the Administrative Agent
within 90 days of the relevant Loan Party or Subsidiary receiving such Net
Contract Termination Proceeds that (1) it or another Loan Party has allocated
such proceeds to specified and described Growth Capital Expenditure project(s),
(2) it is reasonable to expect that such reinvestment shall generate future
annual revenues equal to at least 90% of those generated in the prior fiscal
year by the terminated, cancelled or non-renewed contract giving rise to such
proceeds, and (3) it is reasonable to expect that such annual revenue amounts
shall be reached within two (2) years from the date of such reinvestment.
 
Any Net Contract Termination Proceeds in excess of $1,000,000 retained by the
Borrower but not actually reinvested in a manner consistent with the
representations of the Borrower and this Section 2.9(c)(viii) within such time
period and subject to such conditions shall at that time immediately be used to
prepay the Loans in accordance with the first sentence of this Section
 2.9(c)(viii).”
 
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e. The Forms of Borrowing Requests contained in Exhibits A-2 and A-3 to the Loan
Agreement are hereby deleted and replaced with Exhibits A-2 and A-3 hereto.
 
Section 3. No Further Waiver or Amendment. Except to the extent that provisions
of the Loan Agreement are amended as expressly set forth in Section 2 hereof,
the execution and delivery hereof shall not (a) operate as a modification or
waiver of any right, power or remedy of the Financing Parties or the Collateral
Agent under any of the Loan Documents, (b) cause a novation with respect to any
of the Loan Documents, or (c) extinguish or terminate any obligations of the
Borrower under the Loan Documents.
 
Section 4. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
 
Section 5. Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable, the legality, validity and enforceability of
the remaining provisions of this Agreement shall not be affected or impaired
thereby. The invalidity of a provision in a particular jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
 
Section 6. Headings. The headings in this Agreement have been included herein
for convenience of reference only, are not part of this Agreement, and shall not
be taken into consideration in interpreting this Agreement.
 
Section 7. Entire Agreement. This Agreement comprises the complete and
integrated agreement of the parties hereto on the subject matter hereof and
supersedes all prior agreements, written or oral, on such subject matter.
 
Section 8. Counterparts. This Agreement may be executed by one or more of the
parties hereto on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be maintained by the Borrower and the Administrative Agent.
 
[Signature pages follow.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
 
 

  MACQUARIE DISTRICT ENERGY, INC., as Borrower               By:
/s/ David Bump
  Name:
David Bump
  Title: 
President and CEO

 
AMENDMENT NO. 2 TO MACQUARIE DISTRICT ENERGY LOAN AGREEMENT

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
 
 

  DRESDNER BANK AG NEW YORK BRANCH, as Administrative Agent and Lender          
  By:
/s/ Jorge Rodriguez
  Name: Jorge Rodriguez   Title: 
Director
        By:
/s/ Jonathan Newman
  Name: Jonathan Newman   Title:
Vice President

 
AMENDMENT NO. 2 TO MACQUARIE DISTRICT ENERGY LOAN AGREEMENT

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
 

        LASALLE BANK NATIONAL ASSOCIATION, as Issuing Bank and Lender          
    By:
/s/ Scott D. Moreen
  Name:
Scott D. Moreen
  Title:
First Vice President

 
AMENDMENT NO. 2 TO MACQUARIE DISTRICT ENERGY LOAN AGREEMENT

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Exhibit A-2
to Loan Agreement
 
FORM OF CAPITAL EXPENDITURE LOAN BORROWING REQUEST
 
Dresdner Bank AG,  New York and Grand Cayman Branches
1301 Avenue of the Americas
New York, New York 10019

Attention:
Credit Administration

Telephone:
212-895-6710

Facsimile:
212-895-6996

 
 Re: Borrowing Request
 
This Borrowing Request is delivered pursuant to Section 2.2(b) of the Loan
Agreement dated as of September 20, 2007 (the “Loan Agreement”), among Macquarie
District Energy, Inc. (the “Borrower”), the Lenders party thereto, and Dresdner
Bank AG New York Branch, as Administrative Agent for the Lenders (the
“Administrative Agent”). All capitalized terms used but not defined herein shall
have the meanings specified in the Loan Agreement.
 
The Borrower hereby irrevocably requests a Borrowing of Term Loans as follows:
 

1. 
Requested Date of Borrowing:
   
     
  2. 
Aggregate Amount of Requested Borrowing:
 
$
     
  3. 
Requested initial Interest Period:
   
     
 

 
The Borrower hereby certifies to the Administrative Agent and each Capital
Expenditure Loan Lender that (a) the proceeds of the requested Capital
Expenditure Loans will be applied as set forth in Schedule 1 hereto, which uses
are permitted by the Loan Agreement, (b) as of the date of this Borrowing
Request, all of the conditions precedent set forth in Sections 4.1 or 4.2, as
applicable, of the Loan Agreement have been satisfied or waived by the Lenders,
and on the date specified in Item 1 above, the Borrower will have satisfied all
such conditions precedent to the Capital Expenditure Loans requested hereby,
(c) as of the date of this Borrowing Request, each of the representations and
warranties of the Borrower set forth in Article V of the Loan Agreement is true
and correct to the extent provided therein and each such representation and
warranty will be true and correct on and as of the date of the Borrowing
requested hereby as if made on and as of such date (except to the extent that
such representations and warranties relate solely to an earlier date, in which
case such representations and warranties were true and correct on and as of such
date), and (d) no Default or Event of Default has occurred and is continuing.
 
 
Exh. A-2-1

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Schedule 1
 
 
Please wire transfer the proceeds of the Borrowing to the accounts of the
following Persons at the financial institutions indicated below.
 

   
Person to be Paid
       
Amount to be Transferred for Maintenance Capital Expenditures
 
Name of Payee
 
Account No.
 
Name, Address, ABA#, and Attn:
             
$
 
    
 
    
 
    
           
     
           
Attention:
                                         
Amount to be
Transferred for Growth Capital Expenditure
 
Name of Payee
 
Account No.
 
Name, Address, ABA#, and Attn:
             
$ 
 
   
 
    
 
   
           
    
           
Attention:

 
Dated:_________________
 
 

 
MACQUARIE DISTRICT ENERGY, INC.,
 
as Borrower
             
By:
    
Name:
   
Title:
               
By:
     
Name:
   
Title:
 

Exh. A-2-2

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Exhibit A-3
to Loan Agreement
 
FORM OF REVOLVING LOAN BORROWING OR LETTER OF CREDIT REQUEST
 
Dresdner Bank AG,  New York and Grand Cayman Branches
1301 Avenue of the Americas
New York, New York 10019

Attention:
Credit Administration

Telephone:
212-895-6710

Facsimile:
212-895-6996

 
 Re: Borrowing Request
 
This Borrowing Request is delivered pursuant to Section 2.3(b) of the Loan
Agreement dated as of September 20, 2007 (the “Loan Agreement”), among Macquarie
District Energy, Inc. (the “Borrower”), the Lenders party thereto, among
Dresdner Bank AG New York Branch, as Administrative Agent for the Lenders (the
“Administrative Agent”). All capitalized terms used but not defined herein shall
have the meanings specified in the Loan Agreement.
 
The Borrower hereby irrevocably requests a Borrowing of Revolving Loans as
follows:
 

1. 
Requested Date of Borrowing:
   
    
  2. 
[Aggregate Amount of Requested Borrowing] / [Face amount of Letter of Credit]:
 
$
   
  3 
[The requested initial Interest Period] / [Expiration date of Letter of Credit]:
   
    
 

 
The Borrower hereby certifies to the Administrative Agent that (a) the proceeds
of the requested Revolving Loans will be applied as set forth in Schedule 1
hereto, which uses are permitted by the Loan Agreement, (b) as of the date of
this Borrowing Request, all of the conditions precedent set forth in
Sections 4.1 or 4.2, as applicable, of the Loan Agreement have been satisfied or
waived by the Administrative Agent, and on the date specified in Item 1 above,
the Borrower will have satisfied all such conditions precedent to the Revolving
Loans requested hereby, (c) as of the date of this Borrowing Request, each of
the representations and warranties of the Borrower set forth in Article V of the
Loan Agreement is true and correct to the extent provided therein and each such
representation and warranty will be true and correct on and as of the date of
the Borrowing requested hereby as if made on and as of such date (except to the
extent that such representations and warranties relate solely to an earlier
date, in which case such representations and warranties were true and correct on
and as of such date), and (d) no Default or Event of Default has occurred and is
continuing.
 
Exh. A-3-1

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Schedule 1
 
 
Please wire transfer the proceeds of the Borrowing to the accounts of the
following Persons at the financial institutions indicated below.
 

   
Person to be Paid
       
[Amount to be Transferred] / [Face Amount of Letter of Credit]
 
Name of Payee
 
Account No. (if applicable)
 
Name, Address, ABA#, and Attn:
$ 
 
   
 
  
 
    
           
   
           
Attention:
$
 
    
 
   
 
   
           
    
           
Attention:

 
Dated:____________________
 

 
MACQUARIE DISTRICT ENERGY, INC.,
 
as Borrower
             
By:
      
Name:
   
Title:
               
By:
     
Name:
   
Title:
 

 
Exh. A-3-2

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