Exhibit 10

February 26, 2014

 
To:
ALLETE, Inc.

30 West Superior Street
Duluth, Minnesota 55802-2093

From:
JPMorgan Chase Bank, National Association

125 London Wall
London EC2Y 5AJ
England

From:
J.P. Morgan Securities LLC,

Solely as Agent
tel: (212) 622-5270
fax: (212) 622-0105

___________________________________________________________________________

Dear Sirs,

The purpose of this letter agreement (this “Confirmation”) is to confirm the
terms and conditions of the transaction entered into between us on the Trade
Date specified below (the “Transaction”). This Confirmation constitutes a
“Confirmation” as referred to in the ISDA Master Agreement specified below.

1.
The definitions and provisions contained in the 2000 ISDA Definitions (the “2000
Definitions”) and the 2002 ISDA Equity Derivatives Definitions (the “2002
Definitions” and, together with the 2000 Definitions, the “Definitions”), each
as published by the International Swaps and Derivatives Association, Inc., are
incorporated into this Confirmation. In the event of any inconsistency between
the 2002 Definitions and the 2000 Definitions, the 2002 Definitions will govern.
In the event of any inconsistency between the Definitions and this Confirmation,
this Confirmation will govern.

This Confirmation evidences a complete and binding agreement between Party A and
Party B as to the terms of the Transaction to which this Confirmation relates.
This Confirmation shall supplement, form a part of, and be subject to an
agreement in the form of the 2002 ISDA Master Agreement (the “Agreement”) as if
Party A and Party B had executed an agreement in such form on the Trade Date
(but without any Schedule except for the election of the laws of the State of
New York as the governing law). In the event of any inconsistency between
provisions of that Agreement and this Confirmation, this Confirmation will
prevail for the purpose of the Transaction to which this Confirmation relates.
The parties hereby agree that no Transaction other than the Transaction to which
this Confirmation relates shall be governed by the Agreement. For purposes of
the 2002 Definitions, the Transaction is a Share Forward Transaction.

Party A and Party B each represents to the other that it has entered into the
Transaction in reliance upon such tax, accounting, regulatory, legal, and
financial advice as it deems necessary and not upon any view expressed by the
other.

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2.
The terms of the particular Transaction to which this Confirmation relates are
as follows:

General Terms:

Party A:
JPMorgan Chase Bank, National Association, London Branch

Party B:
ALLETE, Inc.

Trade Date:
February 26, 2014

Effective Date:
March 4, 2014

Base Amount:
Initially, 2,800,000 Shares. On each Settlement Date, the Base Amount shall be
reduced by the number of Settlement Shares for such Settlement Date.

Maturity Date:
March 1, 2015 (or, if such date is not a Scheduled Trading Day, the next
following Scheduled Trading Day).

Forward Price:
On the Effective Date, the Initial Forward Price, and on any other day, the
Forward Price as of the immediately preceding calendar day multiplied by the sum
of (i) 1 and (ii) the Daily Rate for such day; provided that on each Forward
Price Reduction Date, the Forward Price in effect on such date shall be the
Forward Price otherwise in effect on such date, minus the Forward Price
Reduction Amount for such Forward Price Reduction Date.

Initial Forward Price:
$48.00875 per Share.

Daily Rate:
For any day, (i)(A) USD-Federal Funds Rate for such day, minus (B) the Spread,
divided by (ii) 365.

USD-Federal Funds Rate:
For any day, the rate set forth for such day opposite the caption “Federal
funds”, as such rate is displayed on the page “FedsOpen <Index> <GO>” on the
BLOOMBERG Professional Service, or any successor page; provided that if no rate
appears for any day on such page, the rate for the immediately preceding day for
which a rate appears shall be used for such day.

Spread:
0.75%

Forward Price Reduction Date:
Each date (other than the Trade Date) set forth on Schedule I under the heading
“Forward Price Reduction Date.”

Forward Price Reduction
Amount:
For each Forward Price Reduction Date, the Forward Price Reduction Amount set
forth opposite such date on Schedule I. No Forward Price Reduction Amount for a
Forward Price Reduction Date shall be applied to reduce the Forward Price more
than once.

Shares:
Common stock, without par value, of Party B (also referred to herein as the
“Issuer”) (Exchange identifier: “ALE”).

Exchange:
The New York Stock Exchange.

Related Exchange(s):
All Exchanges.

Clearance System:
DTC.

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Calculation Agent:
Party A; provided that following the occurrence and during the continuation of
an Event of Default pursuant to Section 5(a)(vii) of the Agreement with respect
to which Party A is the Defaulting Party, (i) Party A may designate a nationally
or internationally recognized third-party dealer with expertise in
over-the-counter corporate equity derivatives (an “Equity Derivatives Dealer”)
that is not an affiliate of Party A and with respect to which no event of the
type described in Section 5(a)(vii) of the Agreement is ongoing to replace Party
A as Calculation Agent, and (ii) if Party A does not so designate any
replacement Calculation Agent by the 10th Exchange Business Day following the
date on which a calculation or determination is required to be made hereunder by
the Calculation Agent, Party B shall have the right to designate an independent
Equity Derivatives Dealer to replace Party A as Calculation Agent and, in each
case, the parties shall work in good faith to execute any appropriate
documentation required by such replacement Calculation Agent. Any determination
or calculation by the Calculation Agent in such capacity shall be made in good
faith and in a commercially reasonable manner.

    
Settlement Terms:

Settlement Date:
Any Scheduled Trading Day following the Effective Date and up to and including
the Maturity Date, as designated by (a) Party A pursuant to “Termination
Settlement” below or (b) Party B in a written notice (a “Settlement Notice”)
that satisfies the Settlement Notice Requirements and is delivered to Party A at
least (i) three Scheduled Trading Days prior to such Settlement Date, which may
be the Maturity Date, if Physical Settlement applies, and (ii) 90 Scheduled
Trading Days prior to such Settlement Date, which may be the Maturity Date, if
Cash Settlement or Net Share Settlement applies; provided that (i) the Maturity
Date shall be a Settlement Date if on such date the Base Amount is greater than
zero, (ii) if Physical Settlement applies and a Settlement Date specified above
(including a Settlement Date occurring on the Maturity Date) is not a Clearance
System Business Day, the Settlement Date shall be the next following Clearance
System Business Day and (iii) if Cash Settlement or Net Share Settlement applies
and Party A shall have fully unwound its hedge during an Unwind Period by a date
that is more than three Scheduled Trading Days prior to a Settlement Date
specified above, Party A may, by written notice to Party B, specify any
Scheduled Trading Day prior to such originally specified Settlement Date as the
Settlement Date.

Settlement Shares:
With respect to any Settlement Date, a number of Shares, not to exceed the Base
Amount, designated as such by Party B in the related Settlement Notice or by
Party A pursuant to “Termination Settlement” below; provided that on the
Maturity Date the number of Settlement Shares shall be equal to the Base Amount
on such date.

Settlement:
Physical Settlement, Cash Settlement or Net Share Settlement, at the election of
Party B as set forth in a Settlement Notice delivered on or after the Effective
Date that satisfies the Settlement Notice Requirements; provided that Physical
Settlement shall apply (i) if no Settlement Method is validly selected, (ii)
with respect to any Settlement Shares in respect of which Party A is unable, in
its commercially reasonable judgment, to unwind its hedge by the end of the
applicable Unwind Period in a manner that, in the reasonable judgment of Party
A, is consistent with the requirements for qualifying for the safe harbor
provided by Rule 10b-18 under the Exchange Act or due to the lack of sufficient
liquidity in the Shares on any Exchange Business Day during the Unwind Period or
(iii) to any Termination Settlement Date (as defined below under “Termination
Settlement”).

    

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For greater clarity, with respect to any Settlement Date (x) in respect of which
Cash Settlement applies, Party A shall be deemed to have completed unwinding its
hedge in respect of the portion of the Transaction to be settled on such
Settlement Date when it purchases (or, to the extent applicable, unwinds
derivative positions (including, but not limited to, swaps or options related to
the Shares) resulting in Party A’s synthetic purchase of) an aggregate number of
Shares equal to the number of Settlement Shares for such Settlement Date; and
(y) in respect of which Net Share Settlement applies, Party A shall be deemed to
have completed unwinding its hedge in respect of the portion of the Transaction
to be settled on such Settlement Date when it purchases (or, to the extent
applicable, unwinds derivative positions (including, but not limited to, swaps
or options related to the Shares) resulting in Party A’s synthetic purchase of)
an aggregate number of Shares having an aggregate purchase price equal to the
Net Share Purchase Price (defined below) for such Settlement Date.

Settlement Notice
Requirements:
Notwithstanding any other provision hereof, a Settlement Notice delivered by
Party B that specifies Cash Settlement or Net Share Settlement will not be
effective to establish a Settlement Date or require Cash Settlement or Net Share
Settlement unless Party B delivers to Party A with such Settlement Notice a
representation signed by Party B substantially in the following form: “As of the
date of this Settlement Notice, Party B is not aware of any material nonpublic
information concerning itself or the Shares, and is designating the date
contained herein as a Settlement Date and is electing Cash Settlement or Net
Share Settlement, as the case may be, in good faith and not as part of a plan or
scheme to evade compliance with the federal securities laws.”

Unwind Period:
Each Exchange Business Day that is not a Suspension Day during the period from
and including the first Exchange Business Day following the date Party B validly
elects Cash Settlement or Net Share Settlement in respect of a Settlement Date
through the third Scheduled Trading Day preceding such Settlement Date (or the
immediately preceding Exchange Business Day if such Scheduled Trading Day is not
an Exchange Business Day), subject to “Termination Settlement” below. If any
Exchange Business Day during an Unwind Period is a Disrupted Day, the
Calculation Agent shall make commercially reasonable adjustments to the terms of
the Transaction (including, without limitation, the Cash Settlement Amount, the
number of Net Share Settlement Shares and the 10b-18 VWAP) to account for the
occurrence of such Disrupted Day.

Suspension Day:
Any Exchange Business Day on which Party A reasonably determines based on the
advice of counsel that Cash Settlement or Net Share Settlement may violate
applicable securities laws. Party A shall notify Party B if it receives such
advice from its counsel.

Market Disruption Event:
Section 6.3(a)(ii) of the 2002 Definitions is hereby amended by replacing clause
(ii) in its entirety with “(ii) an Exchange Disruption, or” and inserting
immediately following clause (iii) the phrase “; in each case that the
Calculation Agent determines is material.”

Exchange Act:
The Securities Exchange Act of 1934, as amended from time to time.

Physical Settlement:
On any Settlement Date in respect of which Physical Settlement applies, Party B
shall deliver to Party A through the Clearance System the Settlement Shares for
such Settlement Date, and Party A shall deliver to Party B, by wire transfer of
immediately available funds to an account designated by Party B, an amount in
cash equal to the Physical Settlement Amount for

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such Settlement Date, on a delivery versus payment basis. If, on
any    Settlement Date, the Shares to be delivered by Party B to Party A
hereunder are not so delivered (the “Deferred Shares”), and a Forward Price
Reduction Date occurs during the period from, and including, such Settlement
Date to, but excluding, the date such Shares are actually delivered to Party A,
then the portion of the Physical Settlement Amount payable by Party A to Party B
in respect of the Deferred Shares shall be reduced by an amount equal to the
Forward Price Reduction Amount for such Forward Price Reduction Date, multiplied
by the number of Deferred Shares.

Physical Settlement Amount:
For any Settlement Date in respect of which Physical Settlement applies, an
amount in cash equal to the product of (i) the Forward Price on such Settlement
Date and (ii) the number of Settlement Shares for such Settlement Date.

Cash Settlement:
On any Settlement Date in respect of which Cash Settlement applies, if the Cash
Settlement Amount for such Settlement Date is a (i) positive number, then Party
A will pay such Cash Settlement Amount to Party B, or (ii) negative number, then
Party B will pay the absolute value of such Cash Settlement Amount to Party A.
Such amounts shall be paid on the Settlement Date.

Cash Settlement Amount:
For any Settlement Date in respect of which Cash Settlement applies, an amount
determined by the Calculation Agent equal to the difference between (1) the
product of (i) (A) the average Forward Price over the period beginning on, and
including, the date that is one Settlement Cycle following the first day of the
applicable Unwind Period and ending on, and including, such Settlement Date
(calculated assuming no reduction to the Forward Price for any Forward Price
Reduction Date that occurs during the Unwind Period, except as set forth in
clause (2) below), minus USD 0.01, minus (B) the average of the 10b-18 VWAP
prices per Share on each Exchange Business Day during such Unwind Period,
multiplied by (ii) the number of Settlement Shares for such Settlement Date,
minus (2) the product of (i) the Forward Price Reduction Amount for any Forward
Price Reduction Date that occurs during such Unwind Period, multiplied by (ii)
the number of Settlement Shares with respect to which Party A has not unwound
its hedge as of such Forward Price Reduction Date.

Net Share Settlement:
On any Settlement Date in respect of which Net Share Settlement applies, if the
number of Net Share Settlement Shares is a (i) negative number, Party A shall
deliver a number of Shares to Party B equal to the absolute value of the Net
Share Settlement Shares, or (ii) positive number, Party B shall deliver to Party
A the Net Share Settlement Shares; provided that if Party A determines in its
good faith judgment that it would be required to deliver Net Share Settlement
Shares to Party B, Party A may elect to deliver a portion of such Net Share
Settlement Shares on one or more dates prior to the applicable Settlement Date.

Net Share Settlement Shares:
For any Settlement Date in respect of which Net Share Settlement applies, a
number of Shares equal to (a) the number of Settlement Shares for such
Settlement Date, minus (b) the number of Shares Party A actually purchases
during the applicable Unwind Period for a total purchase price (the “Net Share
Purchase Price”) equal to the difference between (1) the product of (i) the
average Forward Price over the period beginning on, and including, the date that
is one Settlement Cycle following the first day of the applicable Unwind Period
and ending on, and including, such Settlement Date (calculated assuming no
reduction to the Forward Price for any Forward Price Reduction Date that occurs
during such Unwind Period, except as set

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forth in clause (2) below), minus USD 0.01, multiplied by (ii) the number of
Settlement Shares for such Settlement Date, minus (2) the product of (i)  the
Forward Price Reduction Amount for any Forward Price Reduction Date that occurs
during such Unwind Period, multiplied by (ii) the number of Shares with respect
to which Party A has not unwound its hedge as of such Forward Price Reduction
Date.

10b-18 VWAP:
For any Exchange Business Day during an Unwind Period which is not a Suspension
Day, the volume-weighted average price at which the Shares trade as reported in
the composite transactions for the Exchange on such Exchange Business Day,
excluding (i) trades that do not settle regular way, (ii) opening (regular way)
reported trades on the Exchange on such Exchange Business Day, (iii) trades that
occur in the last ten minutes before the scheduled close of trading on the
Exchange on such Exchange Business Day and ten minutes before the scheduled
close of the primary trading session in the market where the trade is effected,
and (iv) trades on such Exchange Business Day that do not satisfy the
requirements of Rule 10b-18(b)(3), as determined in good faith by the
Calculation Agent. Party B acknowledges that Party A may refer to the Bloomberg
Page “ALE <Equity> AQR SEC” (or any successor thereto), in its discretion, for
such Exchange Business Day to determine the 10b-18 VWAP.

Settlement Currency:
USD.

Failure to Deliver:
Inapplicable.

Adjustments:

Potential Adjustment Event:
The definition of “Potential Adjustment Event” shall not include clause (iii)
thereof. Under no circumstances will Party A be entitled to an adjustment for
the effects of an Extraordinary Dividend (other than as set forth under the
heading “Extraordinary Dividends” in Section 3 below) or a change in expected
dividends.

Method of Adjustment:
Calculation Agent Adjustment; notwithstanding anything in the 2002 Definitions
to the contrary, the Calculation Agent may make an adjustment pursuant to
Calculation Agent Adjustment to any one or more of the Base Amount, the Forward
Price and any other variable relevant to the settlement or payment terms of the
Transaction.

Additional Adjustment:
If, in Party A’s commercially reasonable judgment, the stock loan fee to Party A
(or an affiliate thereof), excluding the federal funds rate component payable by
the relevant stock lender to Party A or such affiliate (the “Stock Loan Fee”),
over any one month period, of borrowing a number of Shares equal to the Base
Amount to hedge its exposure to the Transaction exceeds a weighted average rate
equal to 75 basis points per annum, the Calculation Agent shall reduce the
Forward Price in order to compensate Party A for the amount by which the Stock
Loan Fee exceeded a weighted average rate equal to 75 basis points per annum
during such period. The Calculation Agent shall notify Party B prior to making
any such adjustment to the Forward Price and, upon the request of Party B, Party
A shall provide an itemized list of the Stock Loan Fees for the applicable one
month period.

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Account Details:

Payments to Party A:
To be advised under separate cover or telephone confirmed prior to each
Settlement Date.

Payments to Party B:
To be advised under separate cover or telephone confirmed prior to each
Settlement Date.

Delivery of Shares to Party A:
To be advised.  

Delivery of Shares to Party B:
To be advised.  

3.
Other Provisions:

Conditions to Effectiveness:

The effectiveness of this Confirmation on the Effective Date shall be subject to
(i) the condition that the representations and warranties of Party B contained
in the Underwriting Agreement dated the date hereof between Party B and J.P.
Morgan Securities LLC as Underwriter (the “Underwriting Agreement”) and any
certificate delivered pursuant thereto by Party B are true and correct on the
Effective Date as if made as of the Effective Date, (ii) the condition that
Party B has performed all of the obligations required to be performed by it
under the Underwriting Agreement on or prior to the Effective Date, (iii) the
condition that Party B has delivered to Party A an opinion of counsel dated as
of the Trade Date with respect to matters set forth in Section 3(a) of the
Agreement (which may include reasonable and customary qualifications, including
those that address the matters set forth in clause (d) under the caption
“Additional Representations, Warranties and Agreements of Party B” herein), (iv)
the satisfaction of all of the conditions set forth in Section 7 of the
Underwriting Agreement, (v) the condition that the Underwriting Agreement shall
not have been terminated pursuant to Section 7, Section 11 or Section 12 thereof
and (vi) the condition that neither of the following has occurred (A) Party A
(or its affiliate) is unable to borrow and deliver for sale a number of Shares
equal to the Base Amount, or (B) in Party A’s commercially reasonable judgment
either it is impracticable to do so or Party A (or its affiliate) would incur a
Stock Loan Fee of more than a rate equal to 200 basis points per annum to do so
(in which event this Confirmation shall be effective but the Base Amount for the
Transaction shall be the number of Shares Party A (or an affiliate thereof) is
required to deliver in accordance with Section 2(c) of the Underwriting
Agreement).

Tax Representations:

(a)
Each of Party A and Party B makes the following representation: It is not
required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, of any Relevant Jurisdiction to make any
deduction or withholding for or on account of any Tax from any payment (other
than interest under Section 9(h) of the Agreement) to be made by it to the other
party under the Agreement. In making this representation, it may rely on (i) the
accuracy of any representations made by the other party pursuant to Section 3(f)
of the Agreement, (ii) the satisfaction of the agreement contained in Section
4(a)(i) or 4(a)(iii) of the Agreement and the accuracy and effectiveness of any
document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of
the Agreement and (iii) the satisfaction of the agreement of the other party
contained in Section 4(d) of this Agreement, except that it will not be a breach
of this representation where reliance is placed on clause (ii) above and the
other party does not deliver a form or document under Section 4(a)(iii) by
reason of material prejudice to its legal or commercial position.

(b)
For the purpose of Section 3(f) of the Agreement, Party A makes the following
representation: It is a “U.S. person” as that term is used in section
1.1441-4(a)(3) of the United States Treasury Regulations for United States
Federal Income Tax purposes.

(c)
For the purpose of Section 3(f) of the Agreement, Party B makes the following
representation: It is a “U.S. person” as that term is used in section
1.1441-4(a)(3) of the United States Treasury Regulations for United States
federal income tax purposes.

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Representations, Warranties and Agreements of Party A and Party B: Each of Party
A and Party B represents, warrants and agrees with the other party as of the
date hereof that:

(a)
It (i) has such knowledge and experience in financial and business affairs as to
be capable of evaluating the merits and risks of entering into the Transaction;
(ii) has consulted with its own legal, financial, accounting and tax advisors in
connection with the Transaction; and (iii) is entering into the Transaction for
a bona fide business purpose.

(b)
It is not and has not been the subject of any civil proceeding of a judicial or
administrative body of competent jurisdiction that could reasonably be expected
to impair materially its ability to perform its obligations hereunder.

(c)
It will by the next succeeding New York Business Day notify the other party upon
obtaining knowledge of the occurrence of any event that would constitute an
Event of Default.

Additional Representations, Warranties and Agreements of Party B: Party B hereby
represents and warrants to, and agrees with, Party A as of the date hereof that:

(a)
Any Shares, when issued and delivered in accordance with the terms of the
Transaction, will be duly authorized and validly issued, fully paid and
nonassessable, and the issuance thereof will not be subject to any preemptive or
similar rights.

(b)
Party B has reserved and will keep available at all times, free from preemptive
rights, out of its authorized but unissued Shares, solely for the purpose of
issuance upon settlement of the Transaction as herein provided, the full number
of Shares as shall be issuable at such time upon settlement of the Transaction.
All Shares so issuable shall, upon such issuance, be accepted for listing or
quotation on the Exchange.

(c)
Party B agrees to provide Party A at least five Exchange Business Days’ written
notice (an “Issuer Repurchase Notice”) prior to executing any repurchase of
Shares by Party B or any of its subsidiaries (or entering into any contract that
would require, or give the option to, Party B or any of its subsidiaries, to
purchase or repurchase Shares), whether out of profits or capital or whether the
consideration for such repurchase is cash, securities or otherwise (an “Issuer
Repurchase”), that alone or in the aggregate would result in the Base Amount
Percentage (as defined below) being (i) equal to or greater than 7.5% of the
outstanding Shares and (ii) greater by 0.5% or more than the Base Amount
Percentage at the time of the immediately preceding Issuer Repurchase Notice (or
in the case of the first such Issuer Repurchase Notice, greater than the Base
Amount Percentage as of the later of the date hereof or the immediately
preceding Settlement Date, if any). The “Base Amount Percentage” as of any day
is the fraction (1) the numerator of which is the Base Amount and (2) the
denominator of which is the number of Shares outstanding on such day.

(d)
No filing with, or approval, authorization, consent, license registration,
qualification, order or decree of, any court or governmental authority or
agency, domestic or foreign, is necessary or required for the execution,
delivery and performance by Party B of this Confirmation and the consummation of
the Transaction (including, without limitation, the issuance and delivery of
Shares on any Settlement Date) except (i) such as have been obtained under the
Securities Act of 1933, as amended (the “Securities Act”), (ii) as may be
required to be obtained under state securities laws and (iii) as have been
obtained from the Minnesota Public Utilities Commission.

(e)
Party B agrees not to make any Issuer Repurchase if, immediately following such
Issuer Repurchase, the Base Amount Percentage would be equal to or greater than
8.5%.

(f)
Party B is not insolvent, nor will Party B be rendered insolvent as a result of
the Transaction.

(g)
Neither Party B nor any of its affiliates shall take or refrain from taking any
action (including, without limitation, any direct purchases by Party B or any of
its affiliates or any purchases by a party to a derivative transaction with
Party B or any of its affiliates), either under this Confirmation, under an
agreement with another party or otherwise, that might cause any purchases of
Shares by Party A or any of its affiliates in connection with any Cash
Settlement or Net Share Settlement of the Transaction not to meet the
requirements of the safe harbor provided by Rule 10b-18 under the Exchange Act
if such purchases were made by Party B.

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(h)
Party B will not engage in any “distribution” (as defined in Regulation M under
the Exchange Act (“Regulation M”)) that would cause a “restricted period” (as
defined in Regulation M) to occur during any Unwind Period.

(i)
Party B is an “eligible contract participant” (as such term is defined in
Section 1a(18) of the Commodity Exchange Act, as amended).

(j)
In addition to any other requirements set forth herein, Party B agrees not to
elect Cash Settlement or Net Share Settlement if, in the reasonable judgment of
either Party A or Party B, such settlement or Party A’s related market activity
would result in a violation of the U.S. federal securities laws or any other
federal or state law or regulation applicable to Party B.

(k)
Party B (i) is capable of evaluating investment risks independently, both in
general and with regard to all transactions and investment strategies involving
a security or securities; (ii) will exercise independent judgment in evaluating
the recommendations of any broker-dealer or its associated persons, unless it
has otherwise notified the broker-dealer in writing; and (iii) has total assets
of at least $50 million as of the date hereof.

(l)
Party B acknowledges and agrees that:

(i)
during the term of the Transaction, Party A and its Affiliates may buy or sell
Shares or other securities or buy or sell options or futures contracts or enter
into swaps or other derivative securities in order to establish, adjust or
unwind its hedge position with respect to the Transaction;

(ii)
Party A and its Affiliates may also be active in the market for the Shares and
Share-linked transactions other than in connection with hedging activities in
relation to the Transaction;

(iii)
Party A shall make its own determination as to whether, when or in what manner
any hedging or market activities in Party B’s securities shall be conducted and
shall do so in a manner that it deems appropriate to hedge its price and market
risk with respect to the Forward Price and the 10b-18 VWAP;

(iv)
any market activities of Party A and its Affiliates with respect to the Shares
may affect the market price and volatility of the Shares, as well as the Forward
Price and 10b-18 VWAP, each in a manner that may be adverse to Party B; and

(v)
the Transaction is a derivatives transaction in which it has granted Party A the
right, under certain circumstances, to receive cash or Shares, as the case may
be; Party A may purchase Shares for its own account at an average price that may
be greater than, or less than, the effective price paid by Party B under the
terms of the Transaction.

(m)
Party B covenants and agrees that within three Exchange Business Days of
obtaining knowledge of the occurrence of any event that would constitute a
Potential Adjustment Event (or, if earlier, the date on which it publicly
discloses such Potential Adjustment Event), it will so notify Party A.

Covenant of Party B:

(a)
Subject to the provisions under the caption “Private Placement Procedures”
below, the parties acknowledge and agree that any Shares delivered by Party B to
Party A on any Settlement Date will be newly issued Shares and when delivered by
Party A (or an affiliate of Party A) to securities lenders from whom Party A (or
an affiliate of Party A) borrowed Shares in connection with hedging its exposure
to the Transaction will be freely saleable without further registration or other
restrictions under the Securities Act, in the hands of those securities lenders,
irrespective of whether such stock loan is effected by Party A or an affiliate
of Party A. Accordingly, subject to the provisions under the caption “Private
Placement Procedures” below, Party B agrees that the Shares that it delivers to
Party A on each Settlement Date will not bear a restrictive legend and that such
Shares will be deposited in, and the delivery thereof shall be effected through
the facilities of, the Clearance System.

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(b)
For the purpose of Sections 4(a)(i) and 4(a)(ii) of the Agreement, Party B shall
deliver to Party A on the Trade Date a properly executed Internal Revenue
Service Form W-9 of Party B or similar documentation establishing an exemption
from backup withholding under the Internal Revenue Code of 1986, as amended (the
“Code”), and shall deliver such documentation to Party A upon the reasonable
request of Party A subsequent to the Trade Date.

(c)
Prior to the final settlement of the Transaction, Party B shall be in compliance
at all times with the total capitalization limitation, equity ratio limitation
and other terms and provisions set forth in the Minnesota Public Utilities
Commission’s (“MPUC”) order issued on April 29, 2013 (the “Order”) in Docket No.
E-015/S-13-126 approving Party B’s capital structure and authorizing issuances
of securities such that Party B will at all times have sufficient authority to
issue a number of Shares equal to twice the initial Base Amount pursuant to the
Transaction, subject to reduction by the number of any Shares issued and
delivered by Party B on any prior Settlement Date hereunder. If prior to the
final settlement of the Transaction, the MPUC issues a subsequent order or
orders approving Party B’s capital structure and authorizing issuances of
securities that supersedes the Order, Party B shall be in compliance at all
times with the total capitalization limitation, if any, equity ratio limitation,
if any, and other terms and provisions set forth in the subsequent order or
orders. Solely for purposes of the covenant of Party B set forth in the
immediately preceding sentence, the phrase “if such failure is not remedied
within 30 days after notice of such failure is given to the party” in Section
5(a)(ii)(1) of the Agreement shall be deemed deleted.

Covenants of Party A:

(a)
Unless the provisions set forth below under “Private Placement Procedures” shall
be applicable, Party A shall use any Shares delivered by Party B to Party A on
any Settlement Date to return to securities lenders to close out open Share
loans created by Party A or an affiliate of Party A in the course of Party A’s
or such affiliate’s hedging activities related to Party A’s exposure under this
Confirmation.

(b)
In connection with bids and purchases of Shares in connection with any Cash
Settlement or Net Share Settlement of the Transaction, Party A shall use its
commercially reasonable efforts to conduct its activities, or cause its
affiliates to conduct their activities, in a manner consistent with the
requirements of the safe harbor provided by Rule 10b-18 under the Exchange Act,
as if such provisions were applicable to such purchases.

(c)
For the purpose of Sections 4(a)(i) and 4(a)(ii) of the Agreement, Party A shall
deliver to Party B on the Trade Date a properly executed Internal Revenue
Service Form W-9 of Party A or similar documentation establishing an exemption
from backup withholding under the Code, and shall deliver such documentation to
Party B upon the reasonable request of Party B subsequent to the Trade Date.

Insolvency Filing:    

Notwithstanding anything to the contrary herein, in the Agreement or in the
Definitions, upon any Insolvency Filing in respect of the Issuer, the
Transaction shall automatically terminate on the date thereof without further
liability of either party to this Confirmation to the other party (except for
any liability in respect of any breach of representation or covenant by a party
under this Confirmation prior to the date of such Insolvency Filing).

The parties hereto agree and acknowledge that (1) at any point prior to any
Insolvency Filing in respect of the Issuer, Party B shall have the unilateral
right to elect Physical Settlement of the Transaction pursuant to the provisions
set forth above under the heading “Settlement Terms”; and (2) the Transaction
shall automatically terminate on the date of any Insolvency Filing pursuant to
the provisions set forth in the immediately preceding paragraph solely to the
extent that Party B failed to elect Physical Settlement of, and to physically
settle, the Transaction pursuant to the provisions set forth above under the
heading Settlement Terms prior to the relevant Insolvency Filing.

Extraordinary Dividends:

If an ex-dividend date for an Extraordinary Dividend occurs on or after the
Trade Date and on or prior to the Maturity Date (or, if later, the last date on
which Shares are delivered by Party B to Party A in settlement of the
Transaction), Party B shall pay an amount, as determined by the Calculation
Agent, in cash equal to the product of such Extraordinary Dividend and the Base
Amount to Party A on the earlier of (i) the date on which such

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Extraordinary Dividend is paid by the Issuer to holders of record of the Shares
or (ii) the Maturity Date. “Extraordinary Dividend” means the per Share amount
of any cash dividend or distribution declared by the Issuer with respect to the
Shares that is specified by the board of directors of the Issuer as an
“extraordinary” dividend.

Acceleration Events:

The following events shall each constitute an “Acceleration Event”:

(a)
Stock Borrow Events. In the commercially reasonable judgment of Party A (i)
Party A (or its affiliate) is unable to hedge Party A’s exposure to the
Transaction because (A) of the lack of sufficient Shares being made available
for Share borrowing by lenders, or (B) it is otherwise commercially
impracticable because Party A would incur a Stock Loan Fee of greater than 200
basis points per annum (a “Stock Borrow Event”);

(b)
Dividends and Other Distributions. On any day occurring after the Trade Date
Party B declares a distribution, issue or dividend to existing holders of the
Shares of (i) any cash dividend (other than an Extraordinary Dividend) to the
extent all cash dividends having an ex-dividend date during the period from and
including any Forward Price Reduction Date (with the Trade Date being a Forward
Price Reduction Date for purposes of this clause (b) only) to but excluding the
next subsequent Forward Price Reduction Date exceeds, on a per Share basis, the
Forward Price Reduction Amount set forth opposite the first date of any such
period on Schedule I or (ii) share capital or securities of another issuer
acquired or owned (directly or indirectly) by Party B as a result of a spin-off
or other similar transaction or (iii) any other type of securities (other than
Shares), rights or warrants or other assets, for payment (cash or other
consideration) at less than the prevailing market price as reasonably determined
by Party A;

(c)
ISDA Early Termination Date. Party A has the right to designate an Early
Termination Date pursuant to Section 6 of the Agreement;

(d)
Other ISDA Events. The announcement of any event that if consummated, would
result in an Extraordinary Event or the occurrence of any Change in Law (other
than as specified in clause (Y) of the definition thereof) or a Delisting;
provided that in case of a Delisting, in addition to the provisions of Section
12.6(a)(iii) of the 2002 Definitions, it will also constitute a Delisting if the
Exchange is located in the United States and the Shares are not immediately
re-listed, re-traded or re-quoted on any of the New York Stock Exchange, the
NASDAQ Global Select Market or the NASDAQ Global Market (or their respective
successors); and provided further that the definition of “Change in Law”
provided in Section 12.9(a)(ii) of the 2002 Definitions is hereby amended by (i)
inserting the parenthetical “(including, for the avoidance of doubt and without
limitation, adoption or promulgation of new regulations authorized or mandated
by existing statute)” at the end of clause (A) thereof, (ii) replacing the
phrase “the interpretation” in the third line thereof with the phrase “or public
announcement of the formal or informal interpretation” and (iii) immediately
following the word “Transaction” in clause (X) thereof, adding the phrase “in
the manner contemplated by Party A on the Trade Date”; or

(e)
Ownership Event. In the reasonable judgment of Party A, on any day, the Share
Amount for such day exceeds the Post-Effective Limit for such day (if any
applies).

For purposes of clause (e) above, the “Share Amount” as of any day is the number
of Shares that Party A and any person whose ownership position would be
aggregated with that of Party A (Party A or any such person, a “Party A Person”)
under any law, rule, regulation or regulatory order that for any reason becomes
applicable to ownership of Shares after the Trade Date (“Applicable Laws”),
owns, beneficially owns, constructively owns, controls, holds the power to vote
or otherwise meets a relevant definition of ownership of under the Applicable
Laws, as determined by Party A in its reasonable discretion. The “Post-Effective
Limit” means (x) the minimum number of Shares that would give rise to reporting
or registration obligations (other than any filing under Section 13 of the
Exchange Act and the rules and regulations thereunder, in each case, as in
effect on the Trade Date) or other requirements (including obtaining prior
approval from any person or entity) of a Party A Person, or would result in an
adverse effect on a Party A Person, under the Applicable Laws, as determined by
Party A in its reasonable discretion (it being understood that reporting
obligations under Section 13 or Section 16 of the Exchange Act and the rules and
regulations thereunder, in each case, as in effect on the Trade Date, will not
be deemed to have an adverse effect), minus (y) 1% of the number of Shares
outstanding.

11

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Termination Settlement:

Upon the occurrence of any Acceleration Event, Party A shall have the right to
designate, upon at least one Scheduled Trading Day’s notice, any Scheduled
Trading Day following such occurrence to be a Settlement Date hereunder (a
“Termination Settlement Date”) to which Physical Settlement shall apply, and to
select the number of Settlement Shares relating to such Termination Settlement
Date; provided that (i) in the case of an Acceleration Event arising out of an
Ownership Event, the number of Settlement Shares so designated by Party A shall
not exceed the number of Shares necessary to reduce the Share Amount to the
Post-Effective Limit and (ii) in the case of an Acceleration Event arising out
of a Stock Borrow Event the number of Settlement Shares so designated by Party A
shall not exceed the number of Shares as to which such Stock Borrow Event
exists. If, upon designation of a Termination Settlement Date by Party A
pursuant to the preceding sentence, Party B fails to deliver the Settlement
Shares relating to such Termination Settlement Date when due or otherwise fails
to perform obligations within its control in respect of the Transaction, it
shall be an Event of Default with respect to Party B and Section 6 of the
Agreement shall apply. If an Acceleration Event occurs during an Unwind Period
relating to a number of Settlement Shares to which Cash Settlement or Net Share
Settlement applies, then on the Termination Settlement Date relating to such
Acceleration Event, notwithstanding any election to the contrary by Party B,
Cash Settlement or Net Share Settlement shall apply to the portion of the
Settlement Shares relating to such Unwind Period as to which Party A has unwound
its hedge and Physical Settlement shall apply in respect of (x) the remainder
(if any) of such Settlement Shares and (y) the Settlement Shares designated by
Party A in respect of such Termination Settlement Date.

Materially Increased Costs:

Upon the occurrence of any Change in Law specified in clause (Y) of the
definition thereof, Party A and Party B agree to negotiate in good faith for at
least five Exchange Business Days (the “Amendment Period”) to amend this
Confirmation to take account of the resulting “materially increased cost” as
such phrase is used in clause (Y) of the definition of “Change in Law.” Such
amendment may, if agreed by Party A and Party B, result in a Change in Law to
which an Acceleration Event applies. If, after negotiating in good faith during
the Amendment Period to so amend this Confirmation, Party A and Party B are
unable to agree upon such an amendment, the relevant Change in Law specified in
clause (Y) of the definition thereof shall constitute an Acceleration Event,
notwithstanding any language in clause (d) under the heading “Acceleration
Events” above to the contrary. The Calculation Agent may, in connection with a
Termination Settlement following such Acceleration Event, reduce the Forward
Price to compensate Party A for any “materially increased costs” incurred during
the Amendment Period. Any Change in Law that results in Party A (or an affiliate
of Party A) incurring a Stock Loan Fee to hedge its exposure to the Transaction
that is equal to or less than a rate equal to 200 basis points per annum shall
not constitute a “materially increased cost” for purposes of clause (Y) of the
definition of “Change in Law.”

Private Placement Procedures:

Notwithstanding anything to the contrary contained in Section 9.11 of the 2002
Definitions, if Party B is unable to comply with the provisions of “Covenant of
Party B” above because of a change in law or a change in the policy of the
Securities and Exchange Commission or its staff, or Party A otherwise determines
that in its reasonable opinion upon the advice of counsel any Settlement Shares
to be delivered to Party A by Party B may not be freely returned by Party A or
its affiliates to securities lenders as described under “Covenant of Party B”
above, then delivery of any such Settlement Shares (the “Restricted Shares”)
shall be effected pursuant to Annex A hereto, unless waived by Party A.

Rule 10b5-1:

It is the intent of Party A and Party B that following any election of Cash
Settlement or Net Share Settlement by Party B, the purchase of Shares by Party A
during any Unwind Period comply with the requirements of Rule 10b5-1(c)(1)(i)(B)
of the Exchange Act and that this Confirmation shall be interpreted to comply
with the requirements of Rule 10b5-1(c).

Party B acknowledges that (i) during any Unwind Period Party B does not have,
and shall not attempt to exercise, any influence over how, when or whether to
effect purchases of Shares by Party A (or its agent or affiliate) in connection
with this Confirmation and (ii) Party B is entering into the Agreement and this
Confirmation in good faith and not as part of a plan or scheme to evade
compliance with federal securities laws including, without limitation, Rule
10b-5 promulgated under the Exchange Act.

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Party B hereby agrees with Party A that during any Unwind Period Party B shall
not communicate, directly or indirectly, any Material Non-Public Information (as
defined herein) to any EDG Personnel (as defined below). For purposes of the
Transaction, “Material Non-Public Information” means information relating to
Party B or the Shares that (a) has not been widely disseminated by wire service,
in one or more newspapers of general circulation, by communication from Party B
to its shareholders, in a press release, in a public filing made by Party B with
the Securities and Exchange Commission, or otherwise publicly disseminated such
that following such dissemination, such information would not be considered
“non-public” by the Securities and Exchange Commission and (b) a reasonable
investor might consider to be of importance in making an investment decision to
buy, sell or hold Shares. For the avoidance of doubt and solely by way of
illustration, information should be presumed “material” if it relates to such
matters as dividend increases or decreases, earnings estimates, changes in
previously released earnings estimates, significant expansion or curtailment of
operations, a significant increase or decline of orders, significant merger or
acquisition proposals or agreements, significant new products or discoveries,
extraordinary borrowing, major litigation, liquidity problems, extraordinary
management developments, purchase or sale of substantial assets, or other
similar information For purposes of the Transaction, “EDG Personnel” means any
employee on the trading side of the Equity Derivatives Group of J.P. Morgan
Securities LLC and does not include Messrs. David Aidelson, Greg Batista, Elliot
Chalom, James Rothschild, David Seaman and Steven Seltzer (or any other person
or persons designated in writing to Party B from time to time by the Compliance
Group of Party A).

Maximum Share Delivery:

Notwithstanding any other provision of this Confirmation, in no event will Party
B be required to deliver on any Settlement Date, whether pursuant to Physical
Settlement, Net Share Settlement, Termination Settlement or any Private
Placement Settlement, more than a number of Shares equal to twice the initial
Base Amount to Party A, subject to reduction by the amount of any Shares
delivered by Party B on any prior Settlement Date.  

Transfer and Assignment:

Party A may assign or transfer any of its rights or delegate any of its duties
hereunder to any affiliate of Party A or any entity organized or sponsored by
Party A without the prior written consent of Party B; provided that (a) (i) such
assignee or transferee has no lesser creditworthiness than Party A immediately
prior to such assignment or transfer or (ii) the obligations of such assignee or
transferee are fully and unconditionally guaranteed by Party A pursuant to a
written guarantee reasonably acceptable to Party B, (b) such assignee or
transferee is a “United States Person” as defined in Section 7701(a)(30) of the
Code and (c) no Event of Default, Potential Event of Default or Termination
Event will occur as a result of such assignment or transfer. Notwithstanding any
other provision in this Confirmation to the contrary requiring or allowing Party
A to purchase, sell, receive or deliver any Shares or other securities to or
from Party B, Party A may designate any of its affiliates to purchase, sell,
receive or deliver such Shares or other securities and otherwise to perform
Party A’s obligations in respect of the Transaction and any such designee may
assume such obligations. Party A shall be discharged of its obligations to Party
B to the extent of any such performance.
 
Matters Relating to Agent:    
Each party agrees and acknowledges that (i) J.P. Morgan Securities LLC, as
agent, (the “Agent”) acts solely as agent on a disclosed basis with respect to
the transactions contemplated hereunder, and (ii) the Agent has no obligation,
by guaranty, endorsement or otherwise, with respect to the obligations of either
Party B or Party A hereunder, either with respect to the delivery of cash or
Shares, either at the beginning or the end of the transactions contemplated
hereby. In this regard, each of Party A and Party B acknowledges and agrees to
look solely to the other for performance hereunder, and not to the Agent.
Indemnity:
Party B agrees to indemnify Party A and its affiliates and their respective
directors, officers, agents and controlling parties (Party A and each such
affiliate or person being an “Indemnified Party”) from and against any and all
losses, claims, damages and liabilities, joint and several, incurred by or
asserted against such Indemnified Party arising out of, in connection with, or
relating to, any breach of any covenant or representation made by Party B in
this Confirmation or the Agreement and will reimburse any Indemnified Party for
all reasonable expenses (including reasonable legal fees and expenses) in
connection with the investigation of, preparation for, or defense of any pending
or threatened claim or any action or proceeding arising therefrom, whether or
not such Indemnified

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Party is a party thereto, but only to the extent that the relevant loss, claim,
damage, liability or expense is found in a final and nonappealable judgment by a
court of competent jurisdiction to have resulted from such breach. Party B will
not be liable under this Indemnity paragraph to the extent that any loss, claim,
damage, liability or expense is found in a final and nonappealable judgment by a
court to have resulted from Party A’s negligence or willful misconduct.
Notice
Non-Reliance:
Applicable

Additional Acknowledgments:
Applicable

Agreements and Acknowledgments
Regarding Hedging Activities:
Applicable

4.
The Agreement is further supplemented by the following provisions:

No Collateral or Setoff.:

Notwithstanding Section 6(f) or any other provision of the Agreement or any
other agreement between the parties to the contrary, the obligations of Party B
hereunder are not secured by any collateral. Obligations under the Transaction
shall not be set off against any other obligations of the parties, whether
arising under the Agreement, this Confirmation, under any other agreement
between the parties hereto, by operation of law or otherwise, and no other
obligations of the parties shall be set off against obligations under the
Transaction, whether arising under the Agreement, this Confirmation, under any
other agreement between the parties hereto, by operation of law or otherwise,
and each party hereby waives any such right of setoff. In calculating any
amounts under Section 6(e) of the Agreement, notwithstanding anything to the
contrary in the Agreement, (a) separate amounts shall be calculated as set forth
in such Section 6(e) with respect to (i) the Transaction and (ii) all other
Transactions, and (b) such separate amounts shall be payable pursuant to Section
6(d)(ii) of the Agreement.

Status of Claims in Bankruptcy:

Party A acknowledges and agrees that this confirmation is not intended to convey
to Party A rights with respect to the transactions contemplated hereby that are
senior to the claims of common stockholders in any U.S. bankruptcy proceedings
of Party B; provided, however, that nothing herein shall limit or shall be
deemed to limit Party A’s right to pursue remedies in the event of a breach by
Party B of its obligations and agreements with respect to this Confirmation and
the Agreement; and provided further, that nothing herein shall limit or shall be
deemed to limit Party A’s rights in respect of any transaction other than the
Transaction.

Limit on Beneficial Ownership:

Notwithstanding any other provisions hereof, Party A shall not have the “right
to acquire” (within the meaning of NYSE Rule 312.04(g)) Shares hereunder and
Party A shall not be entitled to take delivery of any Shares deliverable
hereunder (in each case, whether in connection with the purchase of Shares on
any Settlement Date or any Termination Settlement Date, any Private Placement
Settlement or otherwise) to the extent (but only to the extent) that, after such
receipt of any Shares hereunder, (i) the Share Amount would exceed the
Post-Effective Limit, (ii) Party A’s ultimate parent entity would purchase,
acquire or take (as such terms are used in the Federal Power Act) at any time on
the relevant date in excess of 8.5% of the outstanding Shares or (iii) Party A
and each person subject to aggregation of Shares with Party A under Section 13
or Section 16 of the Exchange Act and rules promulgated thereunder (the “Party A
Group”) would directly or indirectly beneficially own (as such term is defined
for purposes of Section 13 or Section 16 of the Exchange Act and rules
promulgated thereunder) in excess of the lesser of (A) 8.5% of the then
outstanding Shares and (B) 2,051,939 Shares (the “Threshold Number of Shares”).
Any purported delivery hereunder shall be void and have no effect to the extent
(but only to the extent) that, after such delivery, (i) the Share Amount would
exceed the Post-Effective Limit, (ii) Party A’s ultimate parent entity would
purchase, acquire or take (as such terms are used in the Federal Power Act) in
excess of 8.5% of the outstanding Shares or (iii) Party A Group would directly
or indirectly so beneficially own in excess of the Threshold Number of Shares.
If any delivery owed to Party A hereunder is not made, in whole or in part, as a
result of this provision, Party B’s obligation to make such delivery shall not
be extinguished and Party B shall make such delivery as promptly as practicable
after, but in no event later than one Exchange

14

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Business Day after, Party A gives notice to Party B that, after such delivery,
(i) the Share Amount would not exceed the Post-Effective Limit, (ii) Party A’s
ultimate parent entity would not purchase, acquire or take (as such terms are
used in the Federal Power Act) in excess of 8.5% of the outstanding Shares and
(iii) Party A Group would not directly or indirectly so beneficially own in
excess of the Threshold Number of Shares.

In addition, notwithstanding anything herein to the contrary, if any delivery
owed to Party A hereunder is not made, in whole or in part, as a result of the
immediately preceding paragraph, Party A shall be permitted to make any payment
due in respect of such Shares to Party B in two or more tranches that correspond
in amount to the number of Shares delivered by Party B to Party A pursuant to
the immediately preceding paragraph.

Delivery of Cash:

For the avoidance of doubt, nothing in this Confirmation shall be interpreted as
requiring Party B to deliver cash in respect of the settlement of the
Transaction, except (i) as set forth above under the caption “Extraordinary
Dividends,” (ii) in circumstances where cash settlement is within Party B’s
control (including, without limitation, where Party B elects to deliver or
receive cash or where Party B has made a Private Placement Settlement in
accordance with Annex A unavailable due to the occurrence of events within its
control) or (iii) in those circumstances in which holders of Shares would also
receive cash. For the avoidance of doubt, the preceding sentence shall not be
construed as limiting any damages that may be payable by Party B as a result of
breach of this Confirmation.

Wall Street Transparency and Accountability Act:

In connection with Section 739 of the Wall Street Transparency and
Accountability Act of 2010 (the “WSTAA”), the parties hereby agree that neither
the enactment of the WSTAA or any regulation under the WSTAA, nor any
requirement under the WSTAA or an amendment made by the WSTAA, shall limit or
otherwise impair either party’s otherwise applicable rights to terminate,
renegotiate, modify, amend or supplement this Confirmation or the Agreement, as
applicable, arising from a termination event, force majeure, illegality,
increased costs, regulatory change or similar event under this Confirmation, the
2002 Definitions incorporated herein, or the Agreement (including, but not
limited to, rights arising from any, Acceleration Event or Illegality (as
defined in the Agreement)).

Miscellaneous:

(a)
Addresses for Notices. For the purpose of Section 12(a) of the Agreement:

Address for notices or communications to Party A:

JPMorgan Chase Bank, National Association
EDG Marketing Support
Email:
edg_notices@jpmorgan.com

edg_ny_corporate_sales_support@jpmorgan.com
Facsimile No:
1-866-886-4506

With a copy to:
Attention:
Tim Oeljeschlager

Title:
Vice President

Telephone No:
(212) 622-5603

Facsimile No:
(917) 464-3163

and

Attention:
Santosh Sreenivasan

Title:
Managing Director

Head of US Equity-Linked Capital Markets     

Telephone No:
(212) 622-5604

Facsimile No:
(917) 464-2505

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Address for notices or communications to Party B:

Address:
ALLETE, Inc.

30 West Superior Street
Duluth, Minnesota 55802-2093

Attention:
Steve DeVinck

Telephone No:
(218) 723-3920

Email:
sdevinck@allete.com

With a copy to:

Attention:
Deb Amberg

Title:
Senior Vice President, General Counsel and Secretary

Telephone No:
(218) 723-3930

Email:
damberg@allete.com

(b)
Waiver of Right to Trial by Jury. Each party waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury in respect
of any suit, action or proceeding relating to this Confirmation. Each party (i)
certifies that no representative, agent or attorney of the other party has
represented, expressly or otherwise, that such other party would not, in the
event of such a suit action or proceeding, seek to enforce the foregoing waiver
and (ii) acknowledges that it and the other party have been induced to enter
into this Confirmation by, among other things, the mutual waivers and
certifications herein.

(c)
London Branch. Party A is entering into this Confirmation and the Agreement
through its London branch. Notwithstanding the foregoing, Party A represents to
Party B that the obligations of Party A are the same as if it had entered into
this Confirmation and the Agreement through its head or home office in New York.

Acknowledgements.

The parties hereto intend for:

(a)
the Transaction to be a “securities contract” as defined in Section 741(7) of
Title 11 of the United States Code (the “Bankruptcy Code”), qualifying for the
protections under Section 555 of the Bankruptcy Code;

(b)
a party’s right to liquidate the Transaction and to exercise any other remedies
upon the occurrence of any Event of Default under the Agreement with respect to
the other party to constitute a “contractual right” as defined in the Bankruptcy
Code;

(c)
Party A to be a “financial institution” within the meaning of Section 101(22) of
the Bankruptcy Code; and

(d)
all payments for, under or in connection with the Transaction, all payments for
the Shares and the transfer of such Shares to constitute “settlement payments”
as defined in the Bankruptcy Code.

Severability.
If any term, provision, covenant or condition of this Confirmation, or the
application thereof to any party or circumstance, shall be held to be invalid or
unenforceable in whole or in part for any reason, the remaining terms,
provisions, covenants, and conditions hereof shall continue in full force and
effect as if this Confirmation had been executed with the invalid or
unenforceable provision eliminated, so long as this Confirmation as so modified
continues to express, without material change, the original intentions of the
parties as to the subject matter of this Confirmation and the deletion of such
portion of this Confirmation will not substantially impair the respective
benefits or expectations of parties to this Agreement; provided, however, that
this severability provision shall not be applicable if any provision of Section
2, 5, 6 or 13 of the Agreement (or any definition or provision in Section 14 to
the extent that it relates to, or is used in or in connection with any such
Section) shall be so held to be invalid or unenforceable.

[Remainder of page intentionally left blank]

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Please confirm that the foregoing correctly sets forth the terms of our
agreement by signing and returning this Confirmation.

Yours faithfully,

J.P. MORGAN SECURITIES LLC,
as agent for JPMorgan Chase Bank, National Association

By:
/s/ Tim Oeljeschlager
Name:
Tim Oeljeschlager
Title:
Executive Director

Confirmed as of the date first written above:

ALLETE, INC.

By:
/s/ Mark A. Schober
Name:
Mark A. Schober
Title:
Chief Financial Officer

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SCHEDULE I

FORWARD PRICE REDUCTION DATES AND AMOUNTS

Forward Price Reduction Date
Forward Price Reduction Amount
Trade Date
USD 0.00
May 13, 2014
USD 0.49
August 13, 2014
USD 0.49
November 12, 2014
USD 0.49
February 12, 2015
USD 0.49
May 13, 2015
USD 0.49

I-1

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ANNEX A

PRIVATE PLACEMENT PROCEDURES

(i)
If Party B delivers the Restricted Shares pursuant to this clause (i) (a
“Private Placement Settlement”), then delivery of Restricted Shares by Party B
shall be effected in customary private placement procedures with respect to such
Restricted Shares reasonably acceptable to Party A; provided that if, on or
before the date that a Private Placement Settlement would occur, Party B has
taken, or caused to be taken, any action that would make unavailable either the
exemption pursuant to Section 4(a)(2) of the Securities Act for the sale by
Party B to Party A (or any affiliate designated by Party A) of the Restricted
Shares or the exemption pursuant to Section 4(a)(1) or Section 4(a)(3) of the
Securities Act for resales of the Restricted Shares by Party A (or any such
affiliate of Party A) or Party B fails to deliver the Restricted Shares when due
or otherwise fails to perform obligations within its control in respect of a
Private Placement Settlement, it shall be an Event of Default with respect to
Party B and Section 6 of the Agreement shall apply. The Private Placement
Settlement of such Restricted Shares shall include customary representations,
covenants, blue sky and other governmental filings and/or registrations,
indemnities to Party A, due diligence rights (for Party A or any designated
buyer of the Restricted Shares by Party A), opinions and certificates, and such
other documentation as is customary for private placement agreements, all
reasonably acceptable to Party A. In the case of a Private Placement Settlement,
Party A shall, in its good faith discretion, adjust the number of Restricted
Shares to be delivered to Party A hereunder and/or the Forward Price in a
commercially reasonable manner to reflect the fact that such Restricted Shares
may not be freely returned to securities lenders by Party A and may only be
saleable by Party A at a discount to reflect the lack of liquidity in Restricted
Shares. Notwithstanding the Agreement or this Confirmation, the date of delivery
of such Restricted Shares shall be the Clearance System Business Day following
notice by Party A to Party B of the number of Restricted Shares to be delivered
pursuant to this clause (i). For the avoidance of doubt, delivery of Restricted
Shares shall be due as set forth in the previous sentence and not be due on the
Settlement Date or Termination Settlement Date that would otherwise be
applicable.

(ii)
If Party B delivers any Restricted Shares in respect of the Transaction, unless
Party B is advised by counsel that any of the following actions would violate
applicable securities laws because of a change in law or a change in the policy
of the Securities and Exchange Commission or its staff occurring after the Trade
Date, Party B agrees that (i) such Shares may be transferred by and among Party
A and its affiliates and (ii) after the minimum “holding period” within the
meaning of Rule 144(d) under the Securities Act has elapsed after the applicable
Settlement Date, Party B shall promptly remove, or cause the transfer agent for
the Shares to remove, any legends referring to any transfer restrictions from
such Shares upon delivery by Party A (or such affiliate of Party A) to Party B
or such transfer agent of seller’s and broker’s representation letters
customarily delivered by Party A or its affiliates in connection with resales of
restricted securities pursuant to Rule 144 under the Securities Act, each
without any further requirement for the delivery of any certificate, consent,
agreement, opinion of counsel, notice or any other document, any transfer tax
stamps or payment of any other amount or any other action by Party A (or such
affiliate of Party A).

A-1