*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.”







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) .”




2


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.* ***]***








3


**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 BorrowerBy:
            /s/
                David BumpName:
            David
                BumpTitle:
            President
                and CEO







AMENDMENT
              NO. 2 TO MACQUARIE DISTRICT ENERGY LOAN AGREEMENT


**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 LenderBy:
            /s/
                Jorge RodriguezName:
            Jorge
              RodriguezTitle:
            DirectorBy:
            /s/
                Jonathan NewmanName:
            Jonathan
              NewmanTitle:
            Vice
                President







AMENDMENT
              NO. 2 TO MACQUARIE DISTRICT ENERGY LOAN AGREEMENT


**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 LenderBy:
            /s/
                Scott D. MoreenName:
            Scott
                D. MoreenTitle:
            First
                Vice President







AMENDMENT
            NO. 2 TO MACQUARIE DISTRICT ENERGY LOAN AGREEMENT


**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


**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 PaidAmount
                to beTransferred
                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
                BorrowerBy:Name:Title:By:Name:Title:








Exh.
          A-2-2


**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


**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 beTransferred]
                / [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
                BorrowerBy:Name:Title:By:Name:Title:




Exh.
          A-3-2