<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>exhibit10.txt
<DESCRIPTION>FOURTH AMENDED AND RESTATED COMMITTED FACILITY LETTER
<TEXT>
<PAGE>

                                                                      EXHIBIT 10


              FOURTH AMENDED AND RESTATED COMMITTED FACILITY LETTER

                                January 11, 2006

ALLETE, Inc.
30 West Superior Street
Duluth, Minnesota 55802
Attn: Corporate Treasurer

Ladies and Gentlemen:

          Reference  is hereby made to that certain  Third  Amended and Restated
Committed  Facility Letter among the banks party thereto,  LaSalle Bank National
Association,  as agent for such banks and  yourselves  dated as of December  23,
2003, as amended by that certain  First  Amendment to Third Amended and Restated
Committed  Facility  Letter  dated as of December  14, 2004  (together  with all
exhibits,  schedules,  attachments,   appendices  and  amendments  thereof,  the
"EXISTING  COMMITTED  FACILITY  LETTER").  The parties to the Existing Committed
Facility  Letter desire that the Existing  Committed  Facility Letter be amended
and restated in its entirety,  without constituting a novation, all on the terms
and conditions contained herein.  Accordingly,  in consideration of the premises
and the  agreements,  provisions and covenants  contained  herein,  the Existing
Committed  Facility  Letter is hereby amended and restated in its entirety to be
and to read as hereinafter set forth.

          LaSalle Bank National  Association (the "AGENT" and, in its individual
capacity, a "BANK") and the other Banks (as defined below) are pleased to advise
ALLETE,  Inc. (the  "COMPANY")  that the Banks  (defined  below) have  severally
approved,  subject to the  conditions  outlined in this letter  agreement  (this
"AGREEMENT"), a committed credit facility (the "FACILITY"). The amount available
under  the  Facility  shall  not  exceed  at any time the  aggregate  sum of the
Commitments  (defined  below) as may be increased or decreased from time to time
in  accordance  with the terms  hereof.  This  Facility  shall  terminate on the
Maturity  Date  (defined  below).  The  Facility  shall be  available  under the
following  terms and conditions  (certain  capitalized  terms being used and not
otherwise defined as set forth in SECTION 8):

     1.   LOANS.

          The  Company  may from time to time  before the  Maturity  Date borrow
Eurodollar  Loans,  or if one or more  conditions  exist as set forth in Section
3(b) or Section 3(c) hereof, Prime Rate Loans. The aggregate  outstanding amount
of the Loans shall not at any time exceed the aggregate  sum of the  Commitments
as increased or decreased in  accordance  with Section 1(d) hereof.  The Company
may borrow, repay and reborrow in accordance with the terms hereof.

          a.     BORROWING PROCEDURES

                 i.   PRIME RATE LOANS. Each  Prime Rate Loan shall be  on prior
          telephonic notice (promptly  confirmed in writing) from any Authorized
          Officer


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ALLETE, Inc.
January 11, 2006
Page 2

          received  by the Agent not later than 11:00  a.m.  (Chicago,  Illinois
          time),  on the day  such  Loan is to be  made.  Each  such  Notice  of
          Borrowing  shall  specify  (i) the  borrowing  date,  which shall be a
          Banking  Day,  and (ii) the  amount of the Loan.  Each Prime Rate Loan
          shall be in the amount of $5,000,000 or a higher integral  multiple of
          $1,000,000. A Prime Rate Loan shall only be available if the Agent has
          given written notice to the Company that one or more conditions  exist
          as set forth in Section 3(b) or Section 3(c) hereof.

                 ii.  EURODOLLAR LOANS. Each Eurodollar Loan  shall be made upon
          at least three Banking  Days' prior written or telephonic  notice from
          any Authorized  Officer received by the Agent not later than 3:00 p.m.
          (Chicago,  Illinois time). Each such Notice of Borrowing shall specify
          (i) the borrowing date,  which shall be a Banking Day, (ii) the amount
          of such  Loan,  and (iii) the  Interest  Period  for such  Loan.  Each
          Eurodollar  Loan  shall be in the  amount  of  $5,000,000  or a higher
          integral multiple of $1,000,000.

                 iii. The Agent shall give prompt telephonic or telecopy  notice
          to each Bank of the contents of each Notice of  Borrowing  and of such
          Bank's share of such Loan.

                 iv.  Not later  than  11:00 a.m. (Chicago time) (or  1:00  p.m.
          (Chicago time) in the case of any Prime Rate Loan) on the date of each
          borrowing,  each Bank participating  therein shall (except as provided
          in subsection  (v) of this  Section) make  available its share of such
          Loan, in Federal or other funds immediately  available in Chicago,  to
          the Agent at its address set forth next to its signature below. Unless
          the  Agent  is  notified  by a  Bank  that  any  applicable  condition
          specified in Section 4 has not been satisfied, the Agent will make the
          funds  so  received  from  the  Banks  available  to  the  Company  by
          depositing such funds in the manner specified in the related Notice of
          Borrowing.

                 v.   Unless the Agent  shall have received  notice from a  Bank
          prior  to the  date of any  borrowing  that  such  Bank  will not make
          available to the Agent such Bank's  share of such Loan,  the Agent may
          assume  that such Bank has made such share  available  to the Agent on
          the date of such borrowing in accordance  with subsection (iv) of this
          Section 1(a), and the Agent may, in reliance upon such assumption (but
          shall not be obligated to), make available to the Company on such date
          a corresponding  amount. If and to the extent that such Bank shall not
          have so made such  share  available  to the  Agent,  such Bank and the
          Company severally agree to repay to the Agent forthwith on demand such
          corresponding amount together with interest thereon, for each day from
          the date such amount is made  available to the Company  until the date
          such amount is repaid to the Agent, at (i) in the case of the Company,
          a rate per annum equal to the higher of (x) the Prime Rate and (y) the
          interest rate applicable  thereto  pursuant to Section  1(b)(ii),

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ALLETE, Inc.
January 11, 2006
Page 3

          and (ii) in the case of such Bank,  the Prime Rate. If such Bank shall
          repay to the Agent such  corresponding  amount,  such amount so repaid
          shall  constitute  such Bank's Loan included in such Loan for purposes
          of this Agreement.

          b.     INTEREST

                 i.   PRIME RATE LOANS. The unpaid  principal of each Prime Rate
          Loan  shall bear  interest  to the  Maturity  Date at a rate per annum
          equal  to the  Prime  Rate  in  effect  from  time to  time  PLUS  the
          Applicable  Margin.  Accrued  interest  on Prime Rate  Loans  shall be
          payable  quarterly on the 30th day of each December,  March,  June and
          September and on the Maturity Date.

                 ii.  EURODOLLAR LOANS. The  unpaid  principal  amount  of  each
          Eurodollar  Loan shall bear  interest  prior to maturity at a rate per
          annum equal to LIBOR in effect for the Interest Period with respect to
          such Eurodollar Loan plus the Applicable  Margin.  Accrued interest on
          each  Eurodollar Loan shall be payable on the last day of the Interest
          Period  applicable  to such Loan and, if such  Interest  Period  shall
          exceed three months,  at three month  intervals  after the date of the
          Eurodollar Loan.

                 iii. INTEREST AFTER MATURITY. Any  principal of any  Loan which
          is  not  paid  when  due,  whether  at  the  stated   maturity,   upon
          acceleration or otherwise,  shall bear interest from and including the
          date such  principal  shall have become due to (but not including) the
          date of payment thereof in full at a rate per annum equal to the Prime
          Rate from time to time in effect PLUS the Applicable  Margin PLUS 2.0%
          per annum (but until the end of any  Interest  Period for a Eurodollar
          Rate  Loan,  not less  than  2.0 % in  excess  of the  rate  otherwise
          applicable for such Loan).  After maturity,  accrued interest shall be
          payable on demand.

                 iv.  MAXIMUM  RATE. In   no  event  shall  the   interest  rate
          applicable to any amount outstanding hereunder exceed the maximum rate
          of interest  allowed by applicable  law, as amended from time to time.
          Any payment of interest or in the nature of interest in excess of such
          limitation  shall be  credited  as a payment of  principal  unless the
          Company shall request the return of such amount.

                 v.   METHOD OF CALCULATING  INTEREST AND FEES. Interest on each
          Loan  shall  be  computed  on the  basis of a year  consisting  of (i)
          365/366,  as applicable,  days for Prime Rate Loans, and (ii) 360 days
          for Eurodollar Loans, and paid for actual days elapsed.  Fees shall be
          computed  on the basis of a year  consisting  of 360 days and paid for
          actual days elapsed.

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ALLETE, Inc.
January 11, 2006
Page 4

          c.     DISBURSEMENTS AND PAYMENTS

          The Agent shall  transfer  the proceeds of each Loan as directed by an
Authorized Officer.  Each Eurodollar Loan shall be payable on the earlier of the
last day of the Interest  Period  applicable  thereto or the Maturity Date. Each
Prime Rate Loan shall be payable on the Maturity Date. All payments to the Banks
shall be made to the Agent at LaSalle Bank National  Association ABA No. 071 000
505, Account No. 1378018,  reference  ALLETE not later than 2:00 p.m.,  Chicago,
Illinois  time,  on the date when due and  shall be made in lawful  money of the
United  States  of  America  (in  freely   transferable  U.S.  dollars)  and  in
immediately  available  funds.  Any payment that shall be due on a day, which is
not a Banking  Day,  shall be payable on the next  Banking  Day,  subject to the
definition of "Interest Period".

          d.     PREPAYMENT; COMMITMENT INCREASES AND REDUCTIONS

          The  Company may prepay any Loan in whole or in part from time to time
(but, if in part, in an amount not less than  $1,000,000 and integral  multiples
of  $1,000,000 in excess  thereof)  without  premium or penalty  (subject to the
following  paragraph) upon (i) 3 Business Days prior written notice to the Agent
with respect to any Eurodollar  Loan and (ii) prior written notice  delivered to
the  Agent  prior to 10:00  a.m.  (Chicago,  Illinois  time) on the date of such
prepayment with respect to any Prime Rate Loan.

          If the Company shall prepay any Loan, it shall pay to the Agent at the
time of each prepayment,  or at such later time designated by the Agent, any and
all costs described in Section 3(g) hereof.

          The Company may permanently reduce the amount of Commitments from time
to time in amounts not less than $1,000,000 and integral multiples of $1,000,000
in excess thereof  without premium or penalty upon 3 Business Days prior written
notice to the Agent, provided that the aggregate amount of Commitments shall not
exceed  the  aggregate  principal  amount of Loans  then  outstanding.  Any such
reduction  shall be applied  ratably to the Commitments of the Banks and may not
be reinstated.

          The  initial  aggregate  amount of  Commitments  under this  Agreement
equals ONE HUNDRED FIFTY MILLION  DOLLARS  ($150,000,000).  Notwithstanding  the
foregoing to the contrary and so long as no Event of Default exists, the Company
may,  upon  written  election  delivered  to  Agent,  permanently  increase  the
aggregate Commitments under this facility by an amount not to exceed $50,000,000
to TWO HUNDRED MILLION DOLLARS  ($200,000,000)  (less the amount of any previous
reductions of the Commitments  pursuant to this Section 1(d)), by (a) increasing
the  Commitments of one or more Banks which have agreed to such increase  and/or
(b) adding one or more commercial  banks or other Persons as a Bank hereto (each
an  "ADDITIONAL  BANK")  with a  Commitment  in an amount  agreed to by any such
Additional  Bank;  PROVIDED  that no  Additional  Bank shall be added as a party
hereto without the written consent of the Agent (which shall not be unreasonably
withheld) or if an Event of Default then exists.  Any

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ALLETE, Inc.
January 11, 2006
Page 5

such Commitment  increases shall be in minimum  aggregate amounts of $10,000,000
and  $5,000,000  multiples in excess  thereof.  In no event shall the  aggregate
Commitments  exceed  $200,000,000.  Any  increase in the  aggregate  Commitments
pursuant to this clause (d) shall be  effective  three  Business  Days after the
conditions  precedent date set forth in Section 4(c) are either fully  satisfied
or waived by Agent in writing.  The Agent shall promptly  notify the Company and
the Banks of any increase in the amount of the aggregate Commitments pursuant to
this Section and of the Commitment of each Bank after giving effect thereto. The
Company  acknowledges  that, in order to maintain Loans in accordance  with each
Bank's  pro-rata  share of all  outstanding  Loans prior to any  increase in the
aggregate   Commitments   pursuant  to  this  Section,  a  reallocation  of  the
Commitments as a result of a non-pro-rata  increase in the aggregate Commitments
may require  prepayment  of all or portions of certain Loans on the date of such
increase (and any such prepayment  shall be subject to the provisions of Section
3(g)).

          e.     NOTE

          The Company's obligations with respect to the Loans shall be evidenced
by a note for each Bank in the form  attached as EXHIBIT A (each,  a "NOTE" and,
collectively,  the "NOTES").  The amount, the rate of interest for each Loan and
the Interest Period (if applicable)  shall be endorsed by the respective Bank on
the  schedule  attached to its Note,  or at any Bank's  option,  in its records,
which schedule or records shall be conclusive,  absent manifest error, PROVIDED,
HOWEVER,  that the  failure  of any Bank to record any of the  foregoing  or any
error in any such record shall not limit or otherwise  affect the  obligation of
the  Company  to repay all Loans  made to it  hereunder  together  with  accrued
interest thereon.  The Company agrees to issue new notes to replace any existing
Notes if  requested  by Agent in the event that the  Commitments  are  increased
pursuant to the terms of Section 1(d) hereof.

          f.     MATURITY

          All of the  Obligations  shall  become due and payable on the Maturity
Date (as  defined  below) or upon the  earlier  termination  of this  Agreement.
Without limiting the foregoing,  all unpaid Obligations,  if not sooner declared
to be due in  accordance  with the terms  hereof,  together with all accrued and
unpaid  interest  thereon,  shall be due and payable in full on January 11, 2011
(the  "INITIAL  MATURITY  DATE")  or, if an  Extension  Option has been duly and
timely  exercised by the Company in  accordance  with the terms  hereof,  on the
applicable  Extended  Maturity  Date  (as  defined  below).  The  date  when all
Obligations are due and payable hereunder, whether the Initial Maturity Date, an
Extended  Maturity  Date, by  acceleration  or otherwise,  is referred to as the
"MATURITY DATE". Until all Obligations have been fully paid and satisfied (other
than contingent  indemnification  obligations to the extent no unsatisfied claim
with respect thereto has been asserted),  this Agreement shall continue in force
and effect for the benefit of Agent and the Banks and Agent shall be entitled to
exercise all rights and remedies  available to it hereunder and under applicable
laws.

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ALLETE, Inc.
January 11, 2006
Page 6

          Provided that no Event of Default then exists, either on the date that
the Company  delivers an Extension  Request or on the  applicable  Maturity Date
being  extended,  the Company shall have the right (the  "EXTENSION  OPTION") to
extend  the  term  of  this  Agreement  for  two  additional   12-month  periods
commencing,  in the  case of (i) the  first  Extension  Option,  on the  Initial
Maturity  Date and ending on January  11,  2012,  and (ii) the second  Extension
Option,  beginning  on January  11, 2012 and ending on January 11, 2013 (each an
"EXTENDED MATURITY DATE"),  upon and subject to the following terms,  provisions
and conditions:

          (i)    the Company shall deliver an  Extension Request to Agent of its
election to exercise the Extension Option in a timely manner as specified in the
definition of Extension Request,  accompanied by a statement  certifying that no
Event of Default then exists;

          (ii)   no condition or circumstance then exists which could reasonably
be expected to have, either individually or in the aggregate, a Material Adverse
Change;

          (iii)  Agent shall have  received notice on or before the date that is
10 Business Days prior to the then  applicable  anniversary  of the Closing Date
that Banks having Commitments in excess of 50% of the aggregate Commitments then
in effect  (after  giving  effect to any  concomitant  or  pending  increase  in
Commitments  being  made  pursuant  to  Section  1(d))  intend  to  renew  their
respective Commitments; and

          (iv)   except as expressly provided to the contrary in this Agreement,
all of the other terms,  provisions and conditions of this  Agreement,  the Note
and the Loan Documents  remain in full force and effect in accordance with their
respective terms,  including without limitation,  the obligation to make monthly
payments of interest at the then applicable interest rate.

          Each Bank may elect, in its sole and absolute discretion to extend its
Commitment in accordance  with the  Extension  Request of the Company.  Any Bank
failing to respond within 10 Business Days of receiving  written notice by Agent
of its receipt of an Extension  Request  shall be deemed to have declined and to
have  refused  to  consent  to  such  Extension  Request.  If  Banks  (including
Replacement  Banks,  as defined  below)  holding more than 50% of the  aggregate
amount of the renewed  Commitments  (after giving effect to any  concomitant  or
pending increase in Commitments  being made pursuant to Section 1(d)) consent to
the Extension  Request of the Company,  then the then  applicable  Maturity Date
shall be extended  by one  additional  year in  accordance  with such  Extension
Request,  but only with respect to those Banks  consenting to such  extension of
its Commitment.

          g.     REPLACEMENT OF NON-CONSENTING BANKS.

          If any Bank declines to extend the Maturity  Date in  connection  with
its Commitment  pursuant to an Extension  Request made by the Company,  then the
Company  may, at its sole  expense and effort,  upon notice to such Bank and the
Agent, require such Bank to

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ALLETE, Inc.
January 11, 2006
Page 7

assign and delegate,  without  recourse (in  accordance  with and subject to the
restrictions  contained in, and consents  required by, Section 9(o)), all of its
interests,  rights and  obligations  under this  Agreement  and the related Loan
Documents  to  an  assignee  (a  "REPLACEMENT  BANK")  that  shall  assume  such
obligations  (which  assignee  may  be  another  Bank,  if a Bank  accepts  such
assignment), PROVIDED that:

          (i)    the  Company  shall have  paid to the Agent the  assignment fee
specified in Section 9(o);

          (ii)   such Bank shall have received payment of an amount equal to the
outstanding  principal of its Loans, accrued interest thereon,  accrued fees and
all other  amounts  payable to it hereunder  and under the other Loan  Documents
(including  any amounts  under Section 3(g)) from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Company (in the
case of all other amounts); and

          (iii)  such assignment does not conflict with applicable law.

          A Bank shall not be required to make any such assignment or delegation
if, prior thereto, such Bank consents to the Extension Request.

     2.   FEES.

          a.     CERTAIN FEES

          The Company  shall pay, or cause to be paid, to the Agent certain fees
set forth in the Fee Letter at the time  specified in the Fee Letter for payment
of such amounts.

          b.     FACILITY FEE

          The Company agrees to pay to the Banks a facility fee on the amount of
the Facility (whether or not used) at a rate per annum equal to the Facility Fee
Rate.  Such  facility fee shall be payable by the Company  quarterly on the 30th
day of each December, March, June and September after the date hereof and on the
Maturity Date as set forth in Section 1(c) hereof.

          c.     UTILIZATION FEE

          For each day the aggregate amount of Loans outstanding  exceeds 50% of
the  Commitments  as in  effect on such day,  the  Company  agrees to pay to the
Banks, in addition to any other amounts payable hereunder,  a utilization fee on
the aggregate outstanding amount of Loans on such date at a rate per annum equal
to the  Utilization  Fee Rate.  Such  utilization  fee shall be  payable  by the
Company  on the date  when the next  interest  payment  on such  Loans is due in
accordance  with Section  1(b) hereof and on the  Maturity  Date as set forth in
Section 1(c) hereof.

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ALLETE, Inc.
January 11, 2006
Page 8

     3.   ADDITIONAL PROVISIONS RELATING TO LOANS.

          a.   INCREASED COST

          The Company agrees to reimburse each Bank for any increase in the cost
to such Bank of, or any  reduction in the amount of any sum  receivable  by such
Bank in respect of, making or maintaining  any Eurodollar  Loans  (including the
imposition,  modification or deemed  applicability of any reserves,  deposits or
similar requirements). The additional amount required to compensate any Bank for
such  increased  cost or reduced  amount shall be payable by the Company to such
Bank within five days of the Company's  receipt of written notice from such Bank
specifying  such  increased  cost or reduced  amount and the amount  required to
compensate  such Bank therefor,  which notice shall,  in the absence of manifest
error, be conclusive and binding on the Company.  In determining such additional
amount, a Bank may use reasonable averaging, attribution and allocation methods.

          b.     DEPOSITS  UNAVAILABLE  OR    INTEREST   RATE   UNASCERTAINABLE;
IMPRACTICABILITY

          If  the  Company has notified the  Agent  of  its intention  to borrow
          a  Eurodollar  Loan for an  Interest  Period and the Agent or any Bank
determines (which  determination shall be conclusive and binding on the Company)
that:

                      (1)  deposits of the  necessary  amount for such  Interest
          Period are not available to such Bank in the London  interbank  market
          or, by reason of  circumstances  affecting  such market,  adequate and
          reasonable means do not exist for ascertaining the Eurodollar Rate for
          such Interest Period; or

                      (2)  LIBOR will not adequately and fairly reflect the cost
          to the Bank of making or funding a Eurodollar  Loan for such  Interest
          Period; or

                      (3)  the making or funding of Eurodollar Loans has  become
          impracticable  as a result  of any event  occurring  after the date of
          this  Agreement  which,  in the  opinion of the Bank,  materially  and
          adversely affects such Loans or the interbank eurodollar market;

then any notice of a Eurodollar Loan previously given by the Company and not yet
borrowed shall be deemed to be a notice to make a Prime Rate Loan.

          c.     CHANGES IN LAW RENDERING EURODOLLAR LOANS UNLAWFUL

          If at  any time due to the adoption of, or change in, any  law,  rule,
regulation,  treaty or  directive  or in the  interpretation  or  administration
thereof by any court,  central  bank,  governmental  authority  or  governmental
agency charged with the  interpretation  or administration  thereof,  or for any
other reason arising  subsequent to the date hereof, it shall become (or, in the
good faith judgment of any Bank,  raise a substantial  question as to whether it
is) unlawful for such Bank to make or fund any Eurodollar Loan, Eurodollar Loans
shall not be made  hereunder

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ALLETE, Inc.
January 11, 2006
Page 9

for the  duration of such  illegality.  If any such event shall make it unlawful
for any Bank to continue any Eurodollar  Loans  previously made by it hereunder,
the Company  shall,  after being notified by such Bank of the occurrence of such
event,  on such date as shall be specified in such notice,  either  convert such
Eurodollar  Loan to a Prime  Rate Loan or prepay in full such  Eurodollar  Loan,
together with accrued interest  thereon,  without any premium or penalty (except
as provided in Section 3(g)).

          d.     DISCRETION OF THE BANKS AS TO MANNER OF FUNDING

          Each Bank shall be entitled to fund and maintain its funding of all or
          any part of the Loans in any manner it sees fit; it being  understood,
however,  that for purposes of this Note, all determinations  hereunder shall be
made as if such Bank had actually  funded and maintained  each  Eurodollar  Loan
during the  Interest  Period for such  Eurodollar  Loan  through the purchase of
deposits  having a term  corresponding  to such  Interest  Period and bearing an
interest rate equal to LIBOR for such Interest Period.

          e.     TAXES

          All payments by  the  Company of  principal of, and  interest on,  the
          Loans and all other amounts  payable  hereunder shall be made free and
clear of and without deduction for any present or future income,  excise,  stamp
or franchise taxes and other taxes, fees, duties,  withholdings or other charges
of  any  nature  whatsoever  imposed  by any  taxing  authority,  but  excluding
franchise taxes and taxes imposed on or measured by each  respective  Bank's net
income or receipts  (such  non-excluded  items  being  called  "TAXES").  If any
withholding or deduction from any payment to be made by the Company hereunder is
required  in  respect  of any Taxes  pursuant  to any  applicable  law,  rule or
regulation, then the Company will

                 i.   pay  directly  to  the  relevant authority the full amount
          required to be so withheld or deducted;

                 ii.  promptly forward to each Bank an official receipt or other
          documentation  satisfactory  to such Bank  evidencing  such payment to
          such authority; and

                 iii. pay to  each  Bank such additional amount or amounts as is
          necessary to ensure that the net amount actually received by such Bank
          will equal the full amount such Bank would have  received  had no such
          withholding or deduction been required.

Moreover,  if any Taxes are directly asserted against any Bank or on any payment
received  by such Bank  hereunder,  such Bank may pay such Taxes and the Company
will promptly pay such  additional  amount  (including any penalty,  interest or
expense)  as is  necessary  in order that the net amount  received  by such Bank
after the payment of such Taxes (including any Taxes on such

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ALLETE, Inc.
January 11, 2006
Page 10

additional  amount)  shall equal the amount such Bank would have received had no
such Taxes been asserted.

          If the  Company  fails to pay any  Taxes  when due to the  appropriate
taxing  authority or fails to remit to any Bank the  required  receipts or other
required  documentary  evidence,  the Company shall  indemnify such Bank for any
incremental  Tax,  interest,  penalty or expense that may become payable by such
Bank as a result of any such failure.

          f.     INCREASED CAPITAL COSTS

          If   any  change in, or  the  introduction, adoption,   effectiveness,
interpretation,   reinterpretation  or  phase-in  of,  any  law  or  regulation,
directive,  guideline,  decision or request  (whether or not having the force of
law) of any court,  central  bank,  regulator  or other  governmental  authority
affects  or would  affect  the  amount of capital  required  or  expected  to be
maintained  by any Bank or any  entity  controlling  any  Bank,  and  such  Bank
determines (in its sole and absolute  discretion) that the rate of return on its
or such controlling  entity's capital as a consequence of the Loans made by such
Bank or the  commitment  hereunder  is reduced to a level  below that which such
Bank or such  controlling  entity could have achieved but for the  occurrence of
any such circumstance,  then, in any such case, upon notice from time to time by
any Bank to the Company, the Company shall immediately pay directly to such Bank
additional amounts sufficient to compensate such Bank or such controlling entity
for such  reduction  in rate of return.  A statement  of any Bank as to any such
additional  amount or amounts  (including  calculations  thereof  in  reasonable
detail) shall,  in the absence of manifest  error,  be conclusive and binding on
the Company. In determining such amount, each Bank may use reasonable averaging,
attribution and allocation methods.

          g.     FUNDING LOSSES

          The Company will indemnify the Banks upon demand  against any loss  or
expense which any Bank may sustain or incur (including,  without limitation, any
loss or expense  sustained or incurred in  obtaining,  liquidating  or employing
deposits or other  funds  acquired  to effect,  fund or maintain  any Loan) as a
consequence  of (i) any failure of the  Company to make any payment  when due of
any amount due hereunder,  (ii) any failure of the Company to borrow a Loan on a
date specified therefor in a notice thereof, or (iii) any payment (including any
payment  upon  any  Bank's  acceleration  of the  Loans)  or  prepayment  of any
Eurodollar  Loan on a date  other than the last day of the  Interest  Period for
such Loan.

     4.   CONDITIONS PRECEDENT.

          a.     INITIAL LOAN

          The obligation of each Bank to make the initial Loan shall  be subject
to the prior or  concurrent  satisfaction  of each of the  following  conditions
precedent:

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ALLETE, Inc.
January 11, 2006
Page 11

                 i.   The   Company   shall have   delivered  to  the  Agent   a
          certificate  dated the date of the initial  Loan of its  Secretary  or
          Assistant  Secretary as to (i)  resolutions  of its Board of Directors
          then in full force and effect authorizing the execution,  delivery and
          performance of this Agreement,  the Notes,  and each of the other Loan
          Documents;  and (ii) the  incumbency  and  signatures  of those of its
          officers  authorized to act with respect to this  Agreement,  the Note
          and each of the Loan Documents  executed by it, upon which certificate
          the Banks may conclusively rely until it shall have received a further
          certificate  of the  Secretary or  Assistant  Secretary of the Company
          canceling or amending such prior certificate.

                 ii.  Each Bank shall  have received  its  respective  Note duly
          executed and delivered by the Company.

                 iii. The Agent shall have received an opinion dated the date of
          the initial Loan from counsel to the Company in form  satisfactory  to
          the Agent.

          b.     EACH LOAN

          The  obligation of each Bank to make any Loan  (including  the initial
Loan) shall be subject to the following statements being true and correct before
and after giving effect to such Loan: (i) the representations and warranties set
forth in  Section 5 shall be true and  correct  with the same  effect as if then
made  (unless  stated to relate  solely to an earlier  date,  in which case such
representations  and  warranties  shall be true and  correct as of such  earlier
date);  and (ii) no Event of Default or  Unmatured  Event of Default  shall have
occurred and be  continuing,  PROVIDED that this  subsection  4(b)(ii) shall not
apply to an Event of Default  occurring  solely under clause (vii) of subsection
7(a)  with  respect  to a Loan  if the  proceeds  of  such  Loan  will  be  used
exclusively  to repay the Company's  commercial  paper (and, in the event of any
such Loan, the Agent may require the Company to deliver  information  sufficient
to disburse the proceeds of such Loan directly to the holders of such commercial
paper or a paying agent therefor).

          Each  request  for a Loan  shall  be  deemed a  representation  by the
Company, as to the matters set forth in this Section.

          c.     CONDITIONS PRECEDENT TO FACILITY INCREASE

          The  effectiveness  of  any  increase  in  the  aggregate  Commitments
hereunder  pursuant to subsection 1(d) hereof, and the ability of the Company to
borrow  additional  Loans in accordance  with any such increased  Commitment are
subject  to the  satisfaction  of the  following  conditions  (unless  waived in
writing by Agent and the Banks):

                 i.   Agent shall have  received  and  accepted  the  applicable
          documentation  memorializing and evidencing such Commitment  increases
          by the

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ALLETE, Inc.
January 11, 2006
Page 12

          applicable  Banks  together with any joinders to this  Agreement  from
          Additional Banks, all in form and substance  reasonably  acceptable to
          Agent;

                 ii.  This Agreement shall be amended to the extent necessary or
          reasonably  required by Agent in connection  with any such increase in
          Commitments;

                 iii. The Company shall have issued new or  replacement Notes as
          may be requested by any Bank;

                 iv.  The Agent shall  have received such  resolutions, consents
          and/or legal opinions of counsel to the Company as reasonably required
          to  evidence  the  power and  authority  of the  Company  to incur the
          additional  indebtedness  associated with such increase in Commitments
          and its compliance  with all corporate  formalities  necessary to duly
          effectuate the same;

                 v.   No Event of Default shall exist at the time such  increase
          is requested or otherwise would become effective; and

                 vi.  Agent  shall  have  received such other documentation  and
          deliveries as it shall reasonably require.

     5.   REPRESENTATIONS.

          The Company represents and warrants to the Banks that:

          a.     ORGANIZATION

          It is a corporation duly organized and in good standing under the laws
of its  state  of  organization  and  duly  qualified  to do  business  in  each
jurisdiction where such qualification is necessary.

          b.     AUTHORIZATION

          The execution and delivery of this  Agreement,  the Note and the other
Loan Documents and the performance by the Company of its  obligations  hereunder
and thereunder are within the Company's  powers and have been duly authorized by
all necessary  action on the Company's  part, and do not and will not contravene
or conflict with the Company's organizational documents or violate or constitute
a default under any law, rule or regulation any presently  existing  requirement
or   restriction   imposed  by   judicial,   arbitral   or  other   governmental
instrumentality  or any agreement,  instrument or indenture by which the Company
is bound.

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ALLETE, Inc.
January 11, 2006
Page 13

          c.     ENFORCEABILITY

          This Agreement is the Company's legal,  valid and binding  obligation,
enforceable in accordance with its terms.

          d.     FINANCIAL STATEMENTS

          The audited  financial  statements  of the Company as of December  31,
2004 and the interim  financial  statements  of the Company as of September  30,
2005,  copies of which have been  furnished to the Agent,  have been prepared in
accordance with generally accepted accounting  principles  consistently applied,
and present  fairly the  financial  condition of the Company at the date thereof
and the results of its operations  for the period then ended.  Since the date of
such interim financial statements, there has been no Material Adverse Change.

          e.     USE OF PROCEEDS

          The Company  agrees that proceeds of any Loan shall be used solely for
the purpose of providing  liquidity  support with  respect to  commercial  paper
borrowings of the Company or for other valid general corporate purposes.

     6.   COVENANTS.

          From the date of this Agreement and thereafter  until the  termination
of the Facility and until the  Obligations  are paid in full, the Company agrees
that it will:

          a.     FINANCIAL INFORMATION. Furnish to the Agent:

                 i.   As soon as available and in any event within 60 days after
          the end of each of the first three fiscal quarters of each fiscal year
          of the Company,  consolidated  balance sheets,  statements of earnings
          and cash flow of the  Company  and its  Subsidiaries,  and  internally
          prepared unaudited consolidating (A) balance sheets and (B) statements
          of earnings of the  Company,  each for such quarter and for the period
          commencing  at the  beginning  of such fiscal year and ending with the
          end of such quarter,  certified by the chief financial  officer of the
          Company (all of which  consolidating  balance sheets and consolidating
          statements of earnings  shall be treated by the Banks as  confidential
          information  of the  Company,  whether or not  specifically  marked as
          such);

                 ii.  as soon as available  and in any  event  within  120  days
          after the end of each fiscal year of the Company, a copy of the annual
          audit  report  for  such  fiscal  year  for  the  Company,   including
          consolidated  balance  sheets  as of the end of such  fiscal  year and
          statements  of  earnings  and cash  flow for such  fiscal  year of the
          Company  and its  Subsidiaries,  in each  case  certified  in a manner
          acceptable to the Agent by independent public  accountants  acceptable
          to  the  Agent  together

<PAGE>

ALLETE, Inc.
January 11, 2006
Page 14

          with the  internally  prepared  unaudited  consolidating  (a)  balance
          sheets  as of the end of such  fiscal  year,  and  (b)  statements  of
          earnings  for the period  commencing  at the  beginning of such fiscal
          year and ending with the end of such  fiscal year of the Company  (all
          of which consolidating balance sheets and statements of earnings shall
          be treated by the Banks as  confidential  information  of the Company,
          whether or not specifically marked as such);

                 iii. upon the occurrence of  a  Unmatured  Event of  Default or
          Event of Default,  notice of such Unmatured  Event of Default or Event
          of Default; and

                 iv.  such other information with  respect to  the condition  or
          operations,  financial  or  otherwise,  of the Company as any Bank may
          from time to time reasonably request.

          b.     MARGIN STOCK

          Not, and not permit any Subsidiary or affiliate of the Company to, use
the proceeds of any Loan, directly or indirectly,  for the purpose of purchasing
or carrying  any Margin  Stock,  for the  purpose of  reducing  or retiring  any
indebtedness which was originally incurred to purchase or carry any Margin Stock
or for any other  purpose  which might cause any of the Loans to be considered a
"purpose  credit"  within the  meaning of  Regulation  T, U or X of the  Federal
Reserve Board.

          c.     FUNDAMENTAL CHANGES.

          The Company  shall  maintain  and  preserve,  and cause each  Material
Subsidiary to maintain and preserve,  (a) its existence and good standing in the
jurisdiction of its  organization,  and (b) its qualification to do business and
good standing in each  jurisdiction  where the nature of its business makes such
qualification  necessary  (except in those  instances in which the failure to be
qualified or in good standing would not result in a Material Adverse Change) and
shall not:

                 i.   Enter  into  any transaction of merger of consolidation or
          amalgamation,  or liquidate, wind up or dissolve itself (or suffer any
          liquidation or dissolution); or

                 ii.  Convey, sell, lease, transfer or otherwise  dispose of, in
          one  transaction  or a series of  transactions,  all or a  substantial
          portion of its business or property  without the prior written consent
          of the  Required  Banks,  which  consent  shall  not  be  unreasonably
          withheld.

Notwithstanding the foregoing provisions of this subsection (c), the Company may
merge or  consolidate  with any other  Person if the  Company  is the  surviving
corporation or the surviving  corporation assumes the liabilities of the Company
by operation of law or otherwise.

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ALLETE, Inc.
January 11, 2006
Page 15

          d.     MAXIMUM RATIO OF FUNDED DEBT TO TOTAL CAPITAL

The Company shall at all times, measured as of the end of each fiscal quarter of
the Company maintain a maximum ratio of Funded Debt to Total Capital of 0.65  to
1.0.

          e.     COMPLIANCE WITH LAWS

          The Company, its Subsidiaries and its affiliates shall comply with the
requirements of all applicable laws, rules and regulations, except to the extent
such  Person's  noncompliance  could not  reasonably  be expected to result in a
Material Adverse Change.  Notwithstanding and without limiting the generality of
the foregoing,  none of the Company, its Subsidiaries,  its affiliates or any of
their respective  agents acting or benefiting in any capacity in connection with
the  transactions  contemplated  by this  Agreement  is (i) in  violation of any
Terrorism  Law, (ii) engages in or conspires to engage in any  transaction  that
has the purpose of evading or  avoiding  or is  designed  to evade or avoid,  or
attempts to violate,  any of the prohibitions set forth in any Terrorism Law, or
(iii) is a Blocked  Person.  No such Person nor,  to the  knowledge  of any such
Person,  any of its affiliates or agents acting or benefiting in any capacity in
connection with the  transactions  contemplated by this Agreement,  (x) conducts
any business or engages in making or receiving any contribution of funds,  goods
or services to or for the  benefit of any  Blocked  Person,  or (y) deals in, or
otherwise  engages in any  transaction  relating to, any property or interest in
property blocked  pursuant to Executive Order No. 13224,  any similar  executive
order or other  Terrorism  Law.  The  Company  will not,  nor will it permit any
Subsidiary  to,  directly  or  indirectly,  knowingly  enter  into any  material
contract with any Person who is a Blocked Person.  The Company shall immediately
notify  Agent if it has  knowledge  that any  affiliate  thereof is or becomes a
Blocked Person, or (i) is convicted on, (ii) pleads NOLO CONTENDERE to, (iii) is
indicted  on or (iv) is  arraigned  and held  over on  charges  involving  money
laundering or predicate  crimes to money  laundering.  The Company will not, nor
will it permit any  Subsidiary  to,  directly  or  indirectly,  (i)  conduct any
business  or engage in any  transaction  or  dealing  with any  Blocked  Person,
including,  without  limitation,  the making or receiving of any contribution of
funds, goods or services to or for the benefit of any Blocked Person,  (ii) deal
in,  or  otherwise  engage in any  transaction  relating  to,  any  property  or
interests in property blocked pursuant to Executive Order No. 13224, any similar
executive order or other Terrorism Law, or (iii) engage in or conspire to engage
in any  transaction  that  evades or  avoids,  or has the  purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in Executive
Order No. 13224 or other Terrorism Law.

     7.   EVENTS OF DEFAULT.

          a.     EVENTS. Each of  the  following shall  constitute  an  Event of
Default:

                 i.   The  Company  fails to pay  when  due any principal of, or
          interest on, any Loan or any other amount  payable  hereunder or under
          any Note;

<PAGE>

ALLETE, Inc.
January 11, 2006
Page 16

                 ii.  Any material  representation or  warranty  of the  Company
          made  or  deemed  made   hereunder  or  under  any  other  writing  or
          certificate  furnished by or on behalf of the Company to the Agent for
          the purposes of or in connection  with this  Agreement  shall prove to
          have been false or  misleading  in any  material  respect when made or
          deemed made;

                 iii. The Company defaults in the due  performance or observance
          of Section 6(b) hereof or the Company defaults in any material respect
          in the due performance or observance of any other agreement  contained
          herein or in any other Loan Document and such default  shall  continue
          for 30 days after notice  thereof shall have been given to the Company
          from the Agent;

                 iv.  The maturity of any indebtedness of the  Company under any
          agreement or obligation  in an aggregate  principal  amount  exceeding
          $20,000,000 shall be accelerated, or any default shall occur under one
          or more agreements or instruments under which such indebtedness may be
          issued or created and such default shall continue for a period of time
          sufficient to permit the holder or beneficiary of such indebtedness or
          a trustee  therefor to cause the  acceleration of the maturity of such
          indebtedness  or any  mandatory  unscheduled  prepayment,  purchase or
          funding thereof;

                 v.   Judgments or orders for the payment of  money in excess of
          $20,000,000  shall be rendered  against the Company and such judgments
          or orders shall continue  unsatisfied  and unstayed for a period of 30
          days:

                 vi.  The Company or any Material Subsidiary shall

                      (1) become insolvent or generally fail to pay, or admit in
                 writing its  inability or unwillingness  to pay, debts  as they
                 become due;

                      (2) apply for, consent to or acquiesce in the  appointment
                 of a trustee, receiver, sequestrator or other custodian for the
                 Company or any Material Subsidiary or any property  thereof, or
                 make a general assignment for the benefit of creditors;

                      (3) in the   absence   of  such   application, consent  or
                 acquiescence, permit or  suffer  to exist the  appointment of a
                 trustee,  receiver, sequestrator  or  other custodian  for  the
                 Company or any Material Subsidiary or for a substantial part of
                 the property thereof, and such  trustee, receiver, sequestrator
                 or other custodian shall not be discharged within 30 days;

                      (4) permit  or  suffer to  exist  the  commencement of any
                 bankruptcy, reorganization, debt arrangement  or other  case or
                 proceeding under  any  bankruptcy  or  insolvency  law, or  any
                 dissolution, winding up  or liquidation proceeding, in  respect
                 of the Company or any Material

<PAGE>

ALLETE, Inc.
January 11, 2006
Page 17

                 Subsidiary and, if any such case or proceeding is not commenced
                 by the  Company  or such  Material  Subsidiary,  such  case  or
                 proceeding  shall be  consented to  or  acquiesced  in  by  the
                 Company  or such  Material  Subsidiary  or  shall result in the
                 entry  of  an  order  for  relief or shall  remain for 60  days
                 undismissed; or

                      (5) take any action authorizing, or in furtherance of, any
                 of the foregoing; or

                 vii. any Material Adverse Change shall have occurred.

          b.     REMEDIES

          Upon the occurrence of an Event of Default under Section 7(a)(vi), the
commitment of the Banks to make Loans shall be terminated  and the Notes and all
other  obligations  hereunder shall become  immediately due and payable in full;
and upon the  occurrence  of any other Event of Default,  the  commitment of the
Banks to make Loans may be terminated by the Banks and the Agent may declare the
Notes and the  principal  of and accrued  interest  on each Loan,  and all other
amounts payable hereunder, to be forthwith due and payable in full.

     8.   DEFINITIONS.

          As used in this Agreement:

          "AGENT" means LaSalle Bank  National  Association,  in its capacity as
Agent for the Banks hereunder, and its successors in such capacity.

          "APPLICABLE  MARGIN" means (i) with respect to Eurodollar  Loans,  (a)
0.285% per annum for any day Level I Status exists; (b) 0.375% per annum for any
day Level II Status  exists;  (c)  0.450% per annum for any day Level III Status
exists;  (d) 0.600% per annum for any day Level IV Status exists; (e) 0.825% per
annum for any day Level V Status  exists,  and (f)  1.025% per annum for any day
Level VI Status  exists;  and (ii) with respect to Prime Rate Loans,  (a) 0.000%
per annum for any day Level I Status  exists;  (b)  0.000% per annum for any day
Level II Status  exists;  (c)  0.000%  per  annum  for any day Level III  Status
exists;  (d) 0.500% per annum for any day Level IV Status exists; (e) 0.750% per
annum for any day Level V Status  exists;  and (f)  1.500% per annum for any day
Level VI Status exists.

          "AUTHORIZED OFFICER" means each officer or employee of the Company who
is  authorized to request  Loans,  to confirm in writing any such request and to
agree to rates of interest,  as set forth on the schedule of Authorized Officers
most recently delivered by the Company to the Agent.

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ALLETE, Inc.
January 11, 2006
Page 18

          "BANK" means each bank listed on the signature  page hereof,  or which
subsequently becomes a party hereto by execution of a Joinder Agreement, and its
successors and assigns.

          "BANKING DAY" means any day other than a Saturday, Sunday or other day
on which the Banks are  required  or  permitted  to close in Chicago  and,  with
respect to Eurodollar  Loans on which  dealings in Dollars are carried on in the
London interbank market.

          "BLOCKED  PERSON" means any Person:  (i) listed in the annex to, or is
otherwise subject to the provisions of, Executive Order No. 13224; (ii) a Person
owned or controlled by, or acting for or on behalf of, any Person that is listed
in the annex to, or is otherwise  subject to the provisions of,  Executive Order
No.  13224;  (iii) a Person with which any Bank is  prohibited  from  dealing or
otherwise  engaging in any  transaction by any Terrorism Law; (iv) a Person that
commits,  threatens or conspires to commit or supports "terrorism" as defined in
Executive  Order No.  13224  Executive  Order No.  13224  (September  23,  2001)
Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten
to Commit or Support Terrorism (66 Fed. Reg.  49079(2001),  any related enabling
legislation  or any other similar  Executive  Orders related  thereto;  or (v) a
Person that is named a "specially  designated  national" or "blocked  person" on
the most current list published by OFAC or other similar list.

          "CLOSING DATE" means January 11, 2006.

          "COMMITMENT"  means,  with respect to each Bank,  the amount set forth
opposite the name of such Bank on the signature  pages  hereof,  or on a Joinder
Agreement, as applicable.

          "EURODOLLAR  LOAN"  means  any Loan  which  bears  interest  at a rate
determined with reference to LIBOR (plus the Applicable Margin).

          "EVENT OF DEFAULT" means an event described in Section 7(a).

          "EXTENSION  REQUEST" means an request made by the Company, in writing,
to the Agent to  extend  the then  applicable  Maturity  Date for an  additional
period of one year,  such  request to be made by  Borrower  on or before 45 days
prior to the next occurring anniversary of the Closing Date but not earlier than
90 days prior to such  Closing  Date  anniversary  and in any event prior to 365
days  before  the  Maturity  Date being  extended,  and which  request  shall be
irrevocable  once  made  but may be  consented  to by each  Bank in its sole and
absolute discretion and which may be subject to such further conditions,  credit
approval procedures,  documentation  requirements and due diligence as such Bank
may require in its sole and absolute discretion. An Extension Request, in and of
itself,  shall not be deemed an  agreement or  commitment  by the Company to any
additional  or different  terms upon which any extension is  conditioned  by any
Bank.

          "FACILITY" has the meaning set forth in the initial  paragraph of this
Agreement.

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ALLETE, Inc.
January 11, 2006
Page 19

          "FACILITY FEE RATE" means a rate equal to (i) 0.090% per annum for any
day Level I Status  exists;  (ii)  0.100%  per annum for any day Level II Status
exists;  (iii) 0.125% per annum for any day Level III Status exists; (iv) 0.150%
per annum for any day Level IV Status  exists;  (v) 0.175% per annum for any day
Level V Status  exists;  and (vi)  0.225%  per annum for any day Level VI Status
exists

          "FEDERAL  FUNDS  RATE"  means,  the per annum rate at which  overnight
federal  funds  are from  time to time  offered  to the Agent by any bank in the
interbank market, as stated by the Agent.

          "FEE  LETTER"  means that  certain  letter  between the  Borrower  and
LaSalle Bank National Association and its affiliates relating to certain fees to
be paid by the Borrower to, and solely for the account of, LaSalle Bank National
Association and its affiliates, as such letter may from time to time be amended.

          "FUNDED DEBT" means,  for any entity on a consolidated  basis (without
duplication):  (i) all indebtedness of such entity for borrowed money;  (ii) the
deferred  and  unpaid  balance of the  purchase  price  owing by such  entity on
account of any assets or services purchased (other than trade payables and other
accrued  liabilities  incurred in the ordinary  course of business  that are not
overdue by more than 180 days  unless  being  contested  in good  faith) if such
purchase  price is (A) due more than nine months from the date of  incurrence of
the  obligation  in  respect  thereof  or (B)  evidenced  by a note or a similar
written   instrument;   (iii)  all  capitalized  lease  obligations;   (iv)  all
indebtedness secured by a Lien on any property owned by such entity,  whether or
not such  indebtedness has been assumed by such entity or is nonrecourse to such
entity; (v) notes payable and drafts accepted representing  extensions of credit
whether or not  representing  obligations  for  borrowed  money (other than such
notes or drafts from the  deferred  purchase  price of assets or services to the
extent  such  purchase   price  is  excluded  from  clause  (ii)  above);   (vi)
indebtedness evidenced by bonds, notes or similar written instrument;  (vii) the
face amount of all  letters of credit and  bankers'  acceptances  issued for the
account of such entity,  and without  duplication,  all drafts drawn  thereunder
(other  than such  letters of credit,  bankers'  acceptances  and drafts for the
deferred  purchase price of assets or services to the extent such purchase price
is under  interest rate  agreements  or currency  agreements);  (viii)  guaranty
obligations  of such entity with respect to  indebtedness  for borrowed money of
another entity (including affiliates) in excess of $25,000,000 in the aggregate;
provided, however, that in no event shall any calculation of Funded Debt include
(a) deferred taxes,  (b) securitized  trade  receivables,  (c) deferred  credits
including  regulatory assets and  contributions in aid of construction,  (d) the
lease obligations for Lake Superior Paper, Inc. relating to paper mill equipment
as provided  for under an  operating  lease  extending to 2012 or (e) 75% of the
indebtedness associated with Square Butte.

          "GAAP" means generally accepted accounting  principles as in effect in
the United  States from time to time,  applied by the  Company and any  Material
Subsidiary on a basis consistent with the preparation of the Company's financial
statements furnished to the Agent.

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ALLETE, Inc.
January 11, 2006
Page 20

          "INTEREST PERIOD" means for any Eurodollar Loan, a period of one, two,
three or six months,  as designated by the Company,  in each case  commencing on
the date of such Loan.  Each Interest  Period that would  otherwise end on a day
which is not a Banking Day shall end on the next  succeeding  Banking Day unless
such next Banking Day would be the first Banking Day in the next calendar month,
in which case such Interest  Period shall end on the preceding  Banking Day. Any
Interest  Period for a Eurodollar Loan which begins on the last Banking Day of a
calendar month (or on a day for which there is no numerically  corresponding day
in the calendar month at the end of such Interest  Period) shall end on the last
Banking  Day of the  calendar  month  at the end of  such  Interest  Period.  No
Interest  Period shall extend beyond the Maturity  Date,  and in such case,  the
Maturity Date shall be deemed the end of the Interest Period.

          "JOINDER  AGREEMENT"  means a joinder  agreement in the form  attached
hereto as Exhibit "B."

          "LEVEL I STATUS" means, subject to Section 9(r) hereof, the S&P Rating
is A- or higher and the Moody's Rating is A3 or higher.

          "LEVEL II  STATUS"  means,  subject to Section  9(r)  hereof,  Level I
Status  does not exist,  but the S&P  Rating is BBB+ or higher  and the  Moody's
Rating is Baa1 or higher.

          "LEVEL III STATUS"  means,  subject to Section  9(r)  hereof,  neither
Level I Status nor Level II Status  exists,  but the S&P Rating is BBB or higher
and the Moody's rating is Baa2 or higher.

          "LEVEL IV STATUS" means, subject to Section 9(r) hereof, none of Level
I Status,  Level II Status  nor Level III Status  exists,  but the S&P Rating is
BBB- or higher and the Moody's Rating is Baa3 or higher.

          "LEVEL V STATUS" means,  subject to Section 9(r) hereof, none of Level
I Status,  Level II Status, Level III Status nor Level IV Status exists, but the
S&P Rating is BB+ or higher and the Moody's Rating is Ba1 or higher.

          "LEVEL VI STATUS" means, subject to Section 9(r) hereof, none of Level
I Status,  Level II Status, Level III Status, Level IV Status nor Level V Status
exists.

          "LIBOR"  means a rate of  interest  equal  to the  per  annum  rate of
interest at which United States dollar  deposits in an amount  comparable to the
principal balance of the Eurodollar Loan to be made by the Agent in its capacity
as a Bank and for a period equal to the relevant  Interest Period are offered in
the London Interbank  Eurodollar market at 11:00 a.m. (London time) two Business
Days prior to the  commencement  of each  Interest  Period,  as displayed in the
Bloomberg  Financial Markets system, or other  authoritative  source selected by
the  Agent in its  reasonable  discretion,  divided  by a number  determined  by
subtracting from 1.00 the maximum reserve percentage for determining reserves to
be maintained  by member banks of the Federal

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ALLETE, Inc.
January 11, 2006
Page 21

Reserve  System for Eurocurrency liabilities, such rate to remain fixed for such
Interest Period.  The Agent's determination of LIBOR shall be conclusive, absent
manifest error.

          "LOAN" means a loan made pursuant to Section 1.

          "LOAN  DOCUMENTS"  means  this  Agreement,  the Notes  and each  other
agreement, document or instrument delivered in connection with this Agreement.

          "MATERIAL   ADVERSE   CHANGE"   means  any  change  in  the  business,
organization,  assets,  properties  or  condition  (financial  or  other) of the
Company which could  materially  and adversely  affect the Company's  ability to
perform hereunder including,  without limitation,  representations,  warranties,
covenants and payment of Obligations.

          "MATERIAL  SUBSIDIARY" means a Subsidiary of the Company which owns or
holds,  directly  or  indirectly,  assets  accounting  for  10% or  more  of the
aggregate,  consolidated  assets of the Company, as indicated on the most recent
consolidating balance sheets delivered to Agent pursuant to Section 6(a) hereof,
and which shall include, without  limitation,  ALLETE Properties,  LLC but shall
exclude ALLETE Water Services, Inc.

          "MOODY'S  RATING"  means the  rating  assigned  by  Moody's  Investors
Service,  Inc. and any successor thereto that is a nationally  recognized rating
agency  to  the  outstanding  senior  unsecured  non-credit  enhanced  long-term
indebtedness of the Company (or if neither Moody's Investors  Service,  Inc. nor
any such successor shall be in the business of rating long-term indebtedness,  a
nationally  recognized  rating agency in the U.S. as mutually agreed between the
Agent and the Company).  Any reference in this Agreement to any specific  rating
is a reference to such rating as currently defined by Moody's Investors Service,
Inc. (or such a successor) and shall be deemed to refer to the equivalent rating
if such rating system changes.

          "NOTE" has the meaning set forth in Section 1.5.

          "NOTICE OF  BORROWING"  means a notice  from the  Company to the Agent
requesting  the  making of a Loan and which is  delivered  pursuant  to  Section
1(a)(i) or Section 1(a)(ii) hereof.

          "OBLIGATIONS"  means all  obligations  (monetary or  otherwise) of the
Company arising under or in connection  with this Agreement,  the Notes and each
of the other Loan Documents.

          "OFAC" means the U.S.  Department of Treasury Office of Foreign Assets
Control.

          "PATRIOT  ACT" means USA  Patriot  Act,  Title III of Pub.  L.  107-56
("Uniting and Strengthening  America by Providing  Appropriate Tools Required to
Intercept and Obstruct

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ALLETE, Inc.
January 11, 2006
Page 22

Terrorism  Act of 2001), signed  into law  October 26, 2001, together  with  all
regulations promulgated pursuant thereto.

          "PRIME  RATE" means a floating  rate of  interest  equal to the higher
(redetermined  daily) of (i) the per annum  rate of  interest  announced  by the
Agent from time to time at its principal office in Chicago as its prime rate for
Dollar loans or (ii) the Federal Funds Rate plus 0.5%.  (The "prime rate" is set
by the Agent based upon  various  factors  and is used as a reference  point for
pricing some loans. It is not necessarily the best rate available to the Agent's
customers at any point in time.)

          "PRIME  RATE  LOAN"  means any Loan  which  bears  interest  at a rate
determined by reference to the Prime Rate.

          "REQUIRED  BANKS" means, at any time, Banks having at least 66-2/3% of
the aggregate amount of the Commitments.

          "S&P RATING"  means the rating  assigned by Standard & Poor's  Ratings
Group, a division of The McGraw-Hill  Companies,  Inc. and any successor thereto
that  is a  nationally  recognized  rating  agency  to  the  outstanding  senior
unsecured  non-credit  enhanced  long-term  indebtedness  of the Company (or, if
neither  such  division  nor any  successor  shall be in the  business of rating
long-term  indebtedness,  a nationally  recognized  rating agency in the U.S. as
mutually  agreed  between  the Agent and the  Company).  Any  reference  in this
Agreement  to any  specific  rating is a reference  to such rating as  currently
defined by  Standard & Poor's  Ratings  Group,  a  division  of The  McGraw-Hill
Companies,  Inc.  (or such a  successor)  and  shall be  deemed  to refer to the
equivalent rating if such rating system changes.

          "SUBSIDIARY" means, as to the Company, any corporation or other entity
of which more than fifty  percent (50%) of the  outstanding  stock or comparable
equity  interests  having ordinary voting power for the election of the board of
directors  of such  corporation  or  similar  governing  body  in the  case of a
non-corporation  (irrespective  of whether or not,  at the time,  stock or other
equity  interests  of any other  class or classes of such  corporation  or other
entity shall have or might have voting  power by reason of the  happening of any
contingency) is at the time directly or indirectly owned by the Company.

          "TAXES" has the meaning set forth in Section 3(e).

          "TERRORISM  LAWS"  means  any  Laws  relating  to  terrorism  or money
laundering,  including Executive Order No. 13224 (effective September 24, 2001),
the PATRIOT Act, the Laws comprising or implementing  the Bank Secrecy Act (i.e.
The Currency and Foreign Transactions  Reporting Act, 31 USC ss.ss.5311-5330 and
12 USC  ss.ss.1818(s),  1829(b) and  1951-1959,  together with its  implementing
regulation, 31 CFR 103.), and the Laws administered by OFAC.

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ALLETE, Inc.
January 11, 2006
Page 23

          "TOTAL  CAPITAL"  means the sum of  retained  earnings,  stockholders'
equity (including preferred stock and QUIPs), all determined with respect to the
Company and its  Subsidiaries  on a consolidated  basis in accordance  with GAAP
consistently applied, and Funded Debt.

          "UNMATURED  EVENT OF DEFAULT"  means an event which with  notice,  the
lapse of time or both would constitute an Event of Default.

          "UTILIZATION FEE RATE" means a rate equal to 0.100% per annum.

     9.   GENERAL.

          a.     INSTRUCTIONS

          The  Company  hereby  authorizes  the Agent and each Bank to rely upon
telephonic,  written or facsimile instructions of any person identifying himself
or herself as an Authorized  Officer and upon any  signature  which the Agent or
such Bank believes to be genuine,  and the Company shall be bound thereby in the
same manner as if such person were  authorized or such  signature  were genuine.
The  Company  agrees to  indemnify  the Agent and each Bank from and against all
losses and expenses  arising out of the Agent's or such Bank's  reliance on said
instructions or signatures.

          b.     PAYMENTS

          Payments  hereunder  and under the Note  shall be made in  immediately
available funds in Dollars without off-set, counter-claim or other deduction.

          c.     COSTS

          The  Company  shall  pay all costs of the Agent  with  respect  to the
negotiation, preparation, execution and delivery of this Agreement and the other
Loan Documents, any amendments,  waivers, consents or modifications with respect
thereto  and all  costs of the Agent  and each  Bank in  connection  with the of
enforcement  or  collection  of every  kind,  including  but not  limited to all
reasonable  attorneys' fees,  court costs and expenses  incurred by the Agent or
any Bank in connection  with  collection or  protection  or  enforcement  of any
rights hereunder whether or not any lawsuit is ever filed.

          d.     INDEMNIFICATION

          In  consideration  of the execution and delivery of this  Agreement by
the Agent and each Bank and the  extension  of  credit  hereunder,  the  Company
hereby indemnifies, exonerates and holds the Agent and each Bank and each of its
respective  officers,  directors,   employees  and  agents  (collectively,   the
"Indemnified  Parties")  free and harmless from and against any and all actions,
causes of action,  suits, losses,  costs,  liabilities and damages, and expenses
incurred in

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ALLETE, Inc.
January 11, 2006
Page 24

connection therewith  (irrespective of whether such Indemnified Party is a party
to  the  action  for  which  indemnification  hereunder  is  sought),  including
reasonable  attorneys' fees and  disbursements  (collectively,  the "Indemnified
Liabilities"),  incurred by the  Indemnified  Parties or any of them as a result
of, or arising out of, or relating to any transaction financed or to be financed
in whole or in part,  directly or  indirectly,  with the proceeds of any Loan or
any  investigation,  litigation  or  proceeding  related  to  any  environmental
cleanup,  audit,  compliance or other matter  relating to the  protection of the
environment or the release by the Company of any hazardous material,  except for
any  such  Indemnified  Liabilities  arising  for the  account  of a  particular
Indemnified Party by reason of the relevant Indemnified Party's gross negligence
or willful misconduct.  If and to the extent that the foregoing  undertaking may
be unenforceable  for any reason,  the Company hereby agrees to make the maximum
contribution  to  the  payment  in  satisfaction  of  each  of  the  Indemnified
Liabilities which is permissible under applicable law.

          e.     NOTICES

          All notices  and other  communications  provided  to any party  hereto
under  this  Agreement  or any other  Loan  Document  shall be in  writing or by
facsimile and  addressed,  delivered or transmitted to such party at its address
or  facsimile  number  set forth  below its  signature  hereto or at such  other
address or facsimile  number as may be  designated  by such party in a notice to
the other  parties.  Any notice,  if mailed and properly  addressed with postage
prepaid shall be deemed given five days after mailed. Any notice sent by courier
service  shall be deemed given when  received.  Any notice,  if  transmitted  by
facsimile, shall be deemed given when transmitted.

          f.     SURVIVAL

          The Obligations of the Company under Sections 2(b),  3(a), 3(e), 3(f),
3(g),  9(c), 9(d) and 10(g) hereof shall survive any payment of the principal of
and interest on the Loans and the termination of this Agreement.

          g.     COUNTERPARTS

          This Agreement may be executed in any number of separate counterparts,
each of which when so executed and delivered shall be an original,  and all such
counterparts shall together constitute one and the same instrument.  Delivery of
an executed  counterpart  via facsimile or other method shall be as effective as
delivery of an original executed counterpart.

          h.     AMENDMENT AND WAIVER

          Any  provision  of this  Agreement  or any other Loan  Document may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by the Company and the  Required  Banks (and,  if the rights or duties of
the Agent are affected thereby, by the Agent);  PROVIDED that no such amendment,
waiver or  modification  shall,  unless signed by all the Banks,  (i) change the
Commitment of any Bank (except for a ratable  decrease in the

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ALLETE, Inc.
January 11, 2006
Page 25

Commitments of all Banks) or subject any Bank to any additional obligation, (ii)
reduce the  principal of or rate of interest on any Loan or any fees  hereunder,
(iii) postpone the date fixed for any payment of principal of or interest on any
Loan or any fees hereunder or (iv) change the  percentage of the  Commitments or
of the aggregate  unpaid  principal amount of the Notes, or the number of Banks,
which  shall be required  for the Banks or any of them to take any action  under
this Section or any other provision of this  Agreement.  Any waiver by the Agent
or any Bank of any rights  hereunder or under any other Loan Document  shall not
constitute  a waiver of any other rights of the Agent and the Banks from time to
time.

          i.     JURISDICTION

          ANY  LITIGATION  BASED  HEREON,  OR  ARISING  OUT  OF,  UNDER,  OR  IN
CONNECTION  WITH,  THIS  AGREEMENT OR THE NOTE OR ANY OTHER LOAN DOCUMENT OR ANY
COURSE OF CONDUCT, COURSE OF DEALING,  STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF THE AGENT,  ANY BANK OR THE COMPANY  SHALL BE BROUGHT AND  MAINTAINED
EXCLUSIVELY  IN THE  COURTS OF THE STATE OF  ILLINOIS  OR IN THE  UNITED  STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS;  PROVIDED,  HOWEVER,  THAT
ANY SUIT SEEKING  ENFORCEMENT  AGAINST ANY  COLLATERAL OR OTHER  PROPERTY MAY BE
BROUGHT,  AT THE AGENT'S OPTION,  IN THE COURTS OF ANY  JURISDICTION  WHERE SUCH
COLLATERAL  OR OTHER  PROPERTY MAY BE FOUND.  THE COMPANY  HEREBY  EXPRESSLY AND
IRREVOCABLY  SUBMITS TO THE  JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS
AND OF THE UNITED STATES  DISTRICT  COURT FOR THE NORTHERN  DISTRICT OF ILLINOIS
FOR THE  PURPOSE  OF ANY SUCH  LITIGATION  AS SET FORTH  ABOVE  AND  IRREVOCABLY
CONSENTS  TO  PERSONAL  SERVICE  WITHIN OR WITHOUT  THE STATE OF  ILLINOIS.  THE
COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY  OBJECTION  WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY
CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT  THAT  THE  COMPANY  HAS OR  HEREAFTER  MAY  ACQUIRE  ANY  IMMUNITY  FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS  (WHETHER THROUGH SERVICE OR
NOTICE,  ATTACHMENT  PRIOR  TO  JUDGMENT,  ATTACHMENT  IN  AID OF  EXECUTION  OR
OTHERWISE)  WITH  RESPECT  TO  ITSELF  OR  ITS  PROPERTY,   THE  COMPANY  HEREBY
IRREVOCABLY  WAIVES  SUCH  IMMUNITY  IN  RESPECT OF ITS  OBLIGATIONS  UNDER THIS
AGREEMENT, THE NOTE AND EACH OTHER LOAN DOCUMENT.

          j.     WAIVER OF JURY TRIAL

          THE  COMPANY,  THE AGENT  AND THE BANKS  WAIVE ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR  PROCEEDING  TO  ENFORCE  OR DEFEND ANY

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ALLETE, Inc.
January 11, 2006
Page 26

RIGHTS  UNDER  THIS  AGREEMENT,  THE NOTE OR ANY OTHER  LOAN  DOCUMENT,  AND THE
COMPANY,  THE AGENT AND THE BANKS AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL
BE TRIED BEFORE A COURT AND NOT A JURY.

          k.     CONFIDENTIALITY

          The Company, the Agent and the Banks hereby agree and acknowledge that
all  information  relating  to the  Company  or  any  Subsidiary,  which  is (i)
furnished  by the  Company to the Agent and the Banks  pursuant  hereto and (ii)
non-public, confidential or proprietary in nature, shall be kept confidential by
the Agent and the Banks in accordance with  applicable  law,  PROVIDED that such
information and other  information  relating to the Company and its Subsidiaries
may be  distributed  by the Agent  and each  Bank to the  Agent and such  Bank's
respective directors, officers, employees,  attorneys,  affiliates, auditors and
regulators (and, upon the order of any court or other governmental agency having
jurisdiction  over the Agent or any Bank,  to any other  person or entity).  The
provisions of this Section 9(k) shall survive the termination of this Agreement.

          Notwithstanding   anything   herein  to  the  contrary,   confidential
"information" shall not include, and the Agent and each Bank may disclose to any
and all persons, without limitation of any kind, any information with respect to
the U.S.  federal income tax treatment and U.S.  federal income tax structure of
the  transactions  contemplated  hereby and all materials of any kind (including
opinions  or other tax  analyses)  that are  provided  to the Agent or such Bank
relating to such tax treatment and tax structure.

          l.     APPLICABLE LAW

          This  Agreement,  the  Notes and each  other  Loan  Document  shall be
governed by the internal  laws of the State of Illinois  applicable to contracts
made and to be performed entirely within such State.

          m.     SHARING OF SET-OFFS

          Each Bank agrees that if it shall,  by exercising any right of set-off
or counterclaim  or otherwise,  receive payment of a proportion of the aggregate
amount of  principal  and interest due with respect to any Note held by it which
is  greater  than the  proportion  received  by any other Bank in respect of the
aggregate  amount of principal and interest due with respect to any Note held by
such other Bank, the Bank receiving such  proportionately  greater payment shall
purchase  such  participations  in the Notes held by the other  Banks,  and such
other adjustments shall be made, as may be required so that all such payments of
principal  and  interest  with  respect to the Notes held by the Banks  shall be
shared by the Banks pro rata; PROVIDED that nothing in this Section shall impair
the right of any Bank to exercise  any right of set-off or  counterclaim  it may
have  and to apply  the  amount  subject  to such  exercise  to the  payment  of
indebtedness  of the Company other than its  indebtedness  under the Notes.  The
Company agrees,  to the fullest extent

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ALLETE, Inc.
January 11, 2006
Page 27

it may effectively do so under  applicable law, that each Bank and any holder of
a  participation  in a Note,  whether or not acquired  pursuant to the foregoing
arrangements,  may exercise rights of set-off or  counterclaim  and other rights
under applicable law, and with respect to such holder of such a participation as
fully as if such holder of a participation were a direct creditor of the Company
in the amount of such participation.

          n.     PARTICIPATIONS

          Any  Bank  may at  any  time  grant  to one or  more  banks  or  other
institutions (each a "PARTICIPANT") participating interests in its Commitment or
any or all of  its  Loans.  In the  event  of  any  such  grant  by a Bank  of a
participating  interest  to a  Participant,  whether  or not upon  notice to the
Company  and the  Agent,  such Bank  shall  remain  solely  responsible  for the
performance of its  obligations  hereunder,  and the Company and the Agent shall
continue  to deal solely and  directly  with such Bank in  connection  with such
Bank's rights and obligations  under this Agreement.  Any agreement  pursuant to
which any Bank may grant such a  participating  interest shall provide that such
Bank shall retain the sole right and  responsibility  to enforce the obligations
of the Company hereunder including, without limitation, the right to approve any
amendment,  modification  or  waiver of any  provision  of this  Agreement.  The
Company  agrees  that each  Participant  shall,  to the extent  provided  in its
participation  agreement,  be entitled to the benefits of Section 3 with respect
to its participating interest.

          o.     ASSIGNMENTS

          Any  Bank  may at any  time  assign  to one or  more  banks  or  other
financial institutions (each an "ASSIGNEE") all, or a proportionate part of all,
of its  rights and  obligations  under this  Agreement  and the Notes,  and such
Assignee  shall  assume  such  rights  and  obligations,  pursuant  to a Joinder
Agreement  in  substantially  the  form of  Exhibit  B hereto  executed  by such
Assignee and such transferor Bank, with (and subject to) the subscribed  consent
of the Company,  which shall not be unreasonably  withheld, and the Agent, which
shall not be unreasonably withheld; PROVIDED that if an Assignee is an affiliate
of such transferor Bank or was a Bank immediately  prior to such assignment,  no
such consent of the Company  shall be required;  and PROVIDED  FURTHER  that, if
such assignment is in respect of a proportionate  part of the transferor  Bank's
rights and obligations  hereunder and under the Notes, the amount of such Bank's
Commitment  (together with the Commitment of any affiliate of such Bank),  after
taking into account such assignment,  is at least an amount equal to $5,000,000.
Upon  execution and delivery of such  instrument and payment by such Assignee to
such  transferor  Bank of an amount equal to the purchase  price agreed  between
such transferor  Bank and such Assignee,  such Assignee shall be a Bank party to
this  Agreement and shall have all the rights and  obligations  of a Bank with a
Commitment as set forth in such  instrument of  assumption,  and the  transferor
Bank shall be released from its obligations hereunder to a corresponding extent,
and no  further  consent  or  action by any party  shall be  required.  Upon the
consummation of any assignment  pursuant to this Subsection 9(o), the transferor
Bank, the Agent and the Company shall make appropriate  arrangements so that, if
required,  a new Note is issued to the  Assignee.  In  connection  with any

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ALLETE, Inc.
January 11, 2006
Page 28

such  assignment,  the transferor Bank shall pay to the Agent an  administrative
fee for processing such assignment in the amount of $3,500.

          p.     FEDERAL RESERVE BANKS

          Any Bank may at any time assign all or any portion of its rights under
this  Agreement  and its Note to one or more of the Federal  Reserve Banks which
comprise  the Federal  Reserve  System.  No such  assignment  shall  release the
transferor Bank from its obligations hereunder.

          q.     IDENTITY OF HOLDERS

          The Agent and the Company  may,  for all  purposes of this  Agreement,
treat any Bank as the  holder of any Note  drawn to its order  (and owner of the
Loans evidenced  thereby) until written notice of assignment,  participation  or
other transfer shall have been received by them.

          r.     SPLIT-RATINGS

          In the event the Company's  S&P Rating and Moody's  Rating do not fall
within the same Level Status,  then (1) if the S&P Rating's Level Status and the
Moody's Rating's Level Status are in consecutive  Level Status  categories,  the
lower Level Status  shall be deemed to apply for  purposes of this  Agreement or
(2) if the S&P Rating's  Level Status and the Moody's  Rating's Level Status are
not in consecutive Level Status  categories,  then the Level Status  immediately
above the lower of the S&P Rating's Level Status and the Moody's  Rating's Level
Status shall be deemed to apply for purposes of this Agreement.  For purposes of
this  Agreement,  Level I Status  shall be deemed the highest and Level V Status
shall be deemed the lowest.

          s.     CONTINUED EFFECT; NO NOVATION

          Notwithstanding  anything  contained  herein,  this  Agreement  is not
intended to and does not serve to effect a novation of the Obligations. Instead,
it is the express  intention of the parties hereto to reaffirm the  indebtedness
which is outstanding as of the date hereof created under the Existing  Committed
Facility Letter which is evidenced by the notes provided for therein.

          t.     ADDITIONAL LENDERS

          The  Company  may,  upon the  approval  of the Agent,  add  additional
lenders as Banks hereto (each a "NEW BANK"), PROVIDED that if as a result of the
addition  of any New Bank the  aggregate  amount of  Commitments  then in effect
would exceed  $200,000,000,  the  approval of the  Required  Banks shall also be
required  prior to adding  any such New  Bank.  Costs  incurred  by the Agent in
connection with adding any New Bank shall be paid by the Company,  and the

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ALLETE, Inc.
January 11, 2006
Page 29

legal documentation pursuant to which any New Bank is added shall be in form and
substance reasonably satisfactory to the Agent.

          u.     CUSTOMER IDENTIFICATION - USA PATRIOT ACT NOTICE.

          Each Bank (including  Agent) hereby notifies the Company that pursuant
to the  requirements of the PATRIOT Act, and such Bank's policies and practices,
such Bank is  required  to obtain,  verify and record  certain  information  and
documentation that identifies the Company and its affiliates,  which information
includes  the name and  address  of the  Company  or  affiliate  and such  other
information that will allow such Bank to identify the Company and its affiliates
in accordance with the PATRIOT Act.

     10.  THE AGENT.

          a.     APPOINTMENT AND AUTHORIZATION

          Each Bank  irrevocably  appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise  such powers under this  Agreement
and the Notes as are  delegated  to the Agent by the  terms  hereof or  thereof,
together with all such powers as are reasonably incidental thereto.

          b.     AGENT'S FEE

          The  Company  shall pay to the Agent for its own  account  fees in the
amounts  and at the times  previously  agreed  upon  between the Company and the
Agent.

          c.     AGENT AND AFFILIATES

          LaSalle  Bank  National  Association  shall  have the same  rights and
powers  under this  Agreement as any other Bank and may exercise or refrain from
exercising  the same as though it were not the Agent,  and LaSalle Bank National
Association  and its  affiliates may accept  deposits  from,  lend money to, and
generally  engage in any kind of business  with the Company or  affiliate of the
Company as if it were not the Agent hereunder.

          d.     ACTION BY AGENT

          The  obligations of the Agent  hereunder are only those  expressly set
forth herein. Without limiting the generality of the foregoing,  the Agent shall
not be required to take any action with respect to any Event of Default,  except
as expressly  provided in Section 7(b). The Agent's  duties  hereunder and under
the other Loan  Documents are only those  expressly set forth herein and therein
and  nothing  herein  or  therein  shall be  deemed  to  impose on the Agent any
fiduciary obligation to any Bank or the Company.

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ALLETE, Inc.
January 11, 2006
Page 30

          e.     CONSULTATION WITH EXPERTS

          The Agent may consult  with legal  counsel (who may be counsel for the
Company),  independent  public  accountants and other experts selected by it and
shall not be liable  for any  action  taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.

          f.     LIABILITY OF AGENT

          Neither  the  Agent nor any of its  directors,  officers,  agents,  or
employees shall be liable to any Bank for any action taken or not taken by it in
connection herewith (i) with the consent or at the request of the Required Banks
or (ii) in the  absence  of its own  gross  negligence  or  willful  misconduct.
Neither the Agent nor any of its directors,  officers, agents or employees shall
be  responsible  to any Bank  for or have  any  duty to any  Bank to  ascertain,
inquire into or verify (i) any  statement,  warranty or  representation  made in
connection with this Agreement or any borrowing hereunder;  (ii) the performance
or observance  of any of the  covenants or agreements of the Company;  (iii) the
satisfaction of any condition  specified in Article III, except receipt of items
required to be delivered to the Agent;  (iv) the existence or  continuance of an
Event of Default;  or (iv) the validity,  effectiveness  or  genuineness of this
Agreement,  the  Notes,  the other Loan  Documents  or any other  instrument  or
writing  furnished  in  connection  herewith.  The  Agent  shall  not  incur any
liability  by  acting  in  reliance  upon  any  notice,  consent,   certificate,
statement, or other writing (which may be a bank wire, telex or similar writing)
believed  by it in good faith to be genuine or to be signed by the proper  party
or parties.

          g.     INDEMNIFICATION

          Each Bank shall, ratably in accordance with its Commitment,  indemnify
the Agent (to the  extent  not  reimbursed  by the  Company)  against  any cost,
expense (including counsel fees and disbursements),  claim, demand, action, loss
or liability (except such as result from the Agent's gross negligence or willful
misconduct) that the Agent may suffer or incur in connection with this Agreement
or any action taken or omitted by the Agent hereunder.

          h.     CREDIT DECISION

          Each Bank acknowledges that it has, independently and without reliance
upon the Agent or any other Bank, and based on such documents and information as
it has deemed  appropriate,  made its own credit  analysis and decision to enter
into this Agreement. Each Bank also acknowledges that it will, independently and
without  reliance upon the Agent or any other Bank,  and based on such documents
and information as it shall deem  appropriate at the time,  continue to make its
own credit decisions in taking or not taking any action under this Agreement.

<PAGE>

ALLETE, Inc.
January 11, 2006
Page 31

          i.     SUCCESSOR AGENT

          The Agent may resign at any time by giving  written  notice thereof to
the Banks and the Company.  Upon any such resignation,  the Required Banks shall
have the right to appoint a  successor  Agent,  which  successor  Agent shall be
satisfactory to the Company.  If no successor Agent shall have been so appointed
by the Required Banks, and shall have accepted such appointment,  within 30 days
after the retiring  Agent gives notice of  resignation,  then the retiring Agent
may,  on behalf  of the  Banks,  appoint a  successor  Agent,  which  shall be a
commercial  bank  organized or licensed  under the laws of the United  States of
America or of any State thereof and having a combined  capital and surplus of at
least $100,000,000 and shall otherwise be subject to the consent of the Company,
which consent shall not be  unreasonably  withheld.  Upon the  acceptance of its
appointment as Agent hereunder by a successor Agent,  such successor Agent shall
thereupon  succeed  to and become  vested  with all the rights and duties of the
retiring  Agent,  and the retiring Agent shall be discharged from its duties and
obligations  hereunder.  After any  retiring  Agent's  resignation  hereunder as
Agent,  the  provisions  of this  Article  shall  inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent.



                       BALANCE OF PAGE INTENTIONALLY BLANK
                             -SIGNATURE PAGE FOLLOW-

<PAGE>




          Please  acknowledge  your  agreement  to the  foregoing by signing and
returning a copy of this Fourth Amended and Restated Committed Facility Letter.


Commitment:  $35,000,000                   LASALLE BANK NATIONAL
                                           ASSOCIATION, individually as
                                           a Bank and as Agent.

                                           By: /s/ Sean P. Drinan
                                              ----------------------------------
                                                   First Vice President
                                           Title: ------------------------------

                                                /s/ Sean P. Drinan
                                           By: ---------------------------------
                                                   First Vice President
                                           Title: ------------------------------



                                  Address: LaSalle Bank National Association
                                           Syndications Unit
                                           135 South LaSalle Street, Suite 1425
                                           Chicago, Illinois 60603
                                           Attention: Damatria Gilbert
                                           Facsimile: (312) 904-4448
                                           Telephone: (312) 904-8277

                                           With copies to:

                                           LaSalle Bank National Association
                                           135 South LaSalle Street
                                           Chicago, Illinois 60603
                                           Attention: Chip Campbell
                                           Facsimile: (312) 904-1994
                                           Telephone: (312) 904-4497





<PAGE>


                           Fourth Amended and Restated Committed Facility Letter
                                                       Signature Pages Continued


Commitment:  $30,000,000                   U.S. BANK NATIONAL ASSOCIATION,
                                           as a Bank


                                           By: /s/ Christopher W. Rupp
                                              ----------------------------------
                                           Name: Christopher W. Rupp
                                                --------------------------------
                                           Title:   Vice President
                                                   -----------------------------



<PAGE>


                           Fourth Amended and Restated Committed Facility Letter
                                                       Signature Pages Continued


Commitment:  $30,000,000                   WELLS FARGO BANK, NATIONAL
                                           ASSOCIATION, as a Bank


                                           By: /s/ Patrick McCue
                                              ----------------------------------
                                           Name: Patrick McCue
                                                --------------------------------
                                           Title: Vice President
                                                 -------------------------------


                                           By: /s/ Jennifer Barrett
                                              ----------------------------------
                                           Name: Jennifer Barrett
                                                --------------------------------
                                           Title: Vice President
                                                 -------------------------------





<PAGE>


                           Fourth Amended and Restated Committed Facility Letter
                                                       Signature Pages Continued





Commitment:  $30,000,000                   JP MORGAN CHASE BANK, N.A.,
                                           as a Bank


                                           By: /s/ Mike DeForge
                                              ----------------------------------
                                           Name: Mike DeForge
                                                --------------------------------
                                           Title: Vice President
                                                 -------------------------------







<PAGE>


                           Fourth Amended and Restated Committed Facility Letter
                                                       Signature Pages Continued





Commitment:  $25,000,000                   THE BANK OF TOKYO - MITSUBISHI UFJ,
                                           LTD., Chicago Branch, as a Bank



                                           By: /s/ Mr. Tsuguyuki Umene
                                              ----------------------------------
                                           Name: Mr. Tsuguyuki Umene
                                                --------------------------------
                                           Title: Deputy General Manager
                                                 -------------------------------







<PAGE>



Agreed to this 11th day of January, 2006

ALLETE, INC., a Minnesota corporation

By: /s/ James K. Vizanko
   -------------------------------------

Name: James K. Vizanko
     -----------------------------------

Title: Sr. Vice President & CFO
      ----------------------------------

Address:  30 West Superior Street
          Duluth, Minnesota 55802
          Attention: Corporate Treasurer

Facsimile No.: (218) 723-3912
</TEXT>
</DOCUMENT>
