*Execution
      Version*




**AMENDMENT
      NUMBER ONE**


**TO
      LOAN AGREEMENT**




This
      AMENDMENT NUMBER ONE TO LOAN AGREEMENT (this “ Agreement ”),
      dated
      as of December 21, 2007, 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 (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 the definition of “Applicable
      Margin” in 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 .
      The
      definition of “Applicable Margin” in Section
      1.1 of the
      Loan Agreement is hereby deleted and replaced in its entirety with the
      following:




“ Applicable
      Margin ”
means,
      for each day, 1.175% per annum.




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.]*





2


**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 A. BumpName:
            David
                A. BumpTitle:
            President
                and CEO


AMENDMENT
          NO. 1 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/
                Jonathan NewmanName:
            Jonathan
                NewmanTitle:
            Vice
                PresidentBy:
            
            /s/
                Jorge RodriguezName:
            Jorge
                RodriguezTitle:
            Director


AMENDMENT
          NO. 1 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/
                Meghan A. SchultzName:
            Meghan
                A. SchultzTitle:
            President


AMENDMENT
          NO. 1 TO MACQUARIE DISTRICT ENERGY LOAN
          AGREEMENT