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M9@T*=')A:6QE<@T*/#PO4VEZ92`U.#X^#0IS=&%R='AR968-"C$Q-@T*)25%
$3T8-"C\_
`
end
</PDF>exhibit_4a3.htm

     

    Exhibit
      4(a)3

     

    ALLETE
      2007 Form 10-K

    
      

       

    

    ALLETE,
      Inc.

    (formerly
      Minnesota Power & Light Company 

    and
      formerly Minnesota Power, Inc.)

     

    TO

     

    THE
      BANK OF NEW YORK

    (formerly
      Irving Trust Company)

     

    AND

     

    DOUGLAS
      J. MacINNES

     

    (successor
      to Richard H. West, J. A. Austin,

    E.
      J. McCabe, D. W. May, J. A. Vaughan and W. T. Cunningham)

     

                                As
      Trustees under
      ALLETE, Inc.’s 

                                Mortgage
      and Deed of
      Trust dated as of 

                                September
      1,
      1945

                                          

    

    Twenty-seventh
      Supplemental Indenture

     

    Providing,
      among other things, for

     

    First
      Mortgage Bonds, 4.86% Series due April 1, 2013

     

    (Thirty-third
      Series)

     

     

    Dated
      as ofFebruary 1, 2008

     

    
      

       

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    TWENTY-SEVENTH
      SUPPLEMENTAL INDENTURE

     

    THIS
      INDENTURE, dated as of February 1, 2008, by and between ALLETE, Inc.
      (formerly Minnesota Power & Light Company and formerly Minnesota Power,
      Inc.), a corporation of the State of Minnesota, whose post office address is
      30
      West Superior Street, Duluth, Minnesota 55802 (hereinafter sometimes called
      the
“Company”), and THE BANK OF NEW YORK (formerly Irving Trust Company), a
      corporation of the State of New York, whose post office address is 101 Barclay
      Street, New York, New York 10286 (hereinafter sometimes called the “Corporate
      Trustee”), and DOUGLAS J. MACINNES (successor to Richard H. West, J. A. Austin,
      E. J. McCabe, D. W. May, J. A. Vaughan and W. T. Cunningham), whose post office
      address is 1784 W. McGalliard Avenue, Hamilton, New Jersey 08610 (said Douglas
      J. MacInnes being hereinafter sometimes called the “Co-Trustee” and the
      Corporate Trustee and the Co-Trustee being hereinafter together sometimes called
      the “Trustees”), as Trustees under the Mortgage and Deed of Trust, dated as of
      September 1, 1945, between the Company and Irving Trust Company and Richard
      H.
      West, as Trustees, securing bonds issued and to be issued as provided therein
      (hereinafter sometimes called the “Mortgage”), reference to which Mortgage is
      hereby made, this indenture (hereinafter sometimes called the “Twenty-seventh
      Supplemental Indenture”) being supplemental thereto:

     

    WHEREAS,
      the Mortgage was filed and recorded in various official records in the State
      of
      Minnesota; and

     

    WHEREAS,
      an instrument, dated as of October 16, 1957, was executed and delivered under
      which J. A. Austin succeeded Richard H. West as Co-Trustee under the Mortgage,
      and such instrument was filed and recorded in various official records in the
      State of Minnesota; and

     

    WHEREAS,
      an instrument, dated as of April 4, 1967, was executed and delivered under
      which
      E. J. McCabe in turn succeeded J. A. Austin as Co-Trustee under the Mortgage,
      and such instrument was filed and recorded in various official records in the
      State of Minnesota; and

     

    WHEREAS,
      under the Sixth Supplemental Indenture, dated as of August 1, 1975, to which
      reference is hereinafter made, D. W. May in turn succeeded E. J. McCabe as
      Co-Trustee under the Mortgage; and

     

    WHEREAS,
      an instrument, dated as of June 25, 1984, was executed and delivered under
      which
      J. A. Vaughan in turn succeeded D. W. May as Co-Trustee under the Mortgage,
      and
      such instrument was filed and recorded in various official records in the State
      of Minnesota; and

     

    WHEREAS,
      an instrument, dated as of July 27, 1988, was executed and delivered under
      which
      W. T. Cunningham in turn succeeded J. A. Vaughan as Co-Trustee under the
      Mortgage, and such instrument was filed and recorded in various official records
      in the State of Minnesota; and

     

    WHEREAS,
      on May 12, 1998, the Company filed Amended and Restated Articles of
      Incorporation with the Secretary of State of the State of Minnesota changing
      its
      name from Minnesota Power & Light Company to Minnesota Power, Inc. effective
      May 27, 1998; and

    WHEREAS,
      an instrument, dated as of April 15, 1999, was executed and delivered under
      which Douglas J. MacInnes in turn succeeded W. T. Cunningham as Co-Trustee
      under
      the Mortgage, and such instrument was filed and recorded in various official
      records in the State of Minnesota; and

     

    WHEREAS,
      on May 8, 2001, the Company filed Amended and Restated Articles of Incorporation
      with the Secretary of State of the State of Minnesota changing its name from
      Minnesota Power, Inc. to ALLETE, Inc.; and

     

    WHEREAS,
      by the Mortgage the Company covenanted, among other things, that it would
      execute and deliver such supplemental indenture or indentures and such further
      instruments and do such further acts as might be necessary or proper to carry
      out more effectually the purposes of the Mortgage and to make subject to the
      lien of the Mortgage any property thereafter acquired and intended to be subject
      to the lien thereof; and

     

    WHEREAS,
      for said purposes, among others, the Company executed and delivered the
      following indentures supplemental to the Mortgage:

     

    
      	
              Designation

            	
              Dated
                as of

            
	
              First
                Supplemental Indenture

            	
              March
                1, 1949

            
	
              Second
                Supplemental Indenture

            	
              July
                1, 1951

            
	
              Third
                Supplemental Indenture

            	
              March
                1, 1957

            
	
              Fourth
                Supplemental Indenture

            	
              January
                1, 1968

            
	
              Fifth
                Supplemental Indenture

            	
              April
                1, 1971

            
	
              Sixth
                Supplemental Indenture

            	
              August
                1, 1975

            
	
              Seventh
                Supplemental Indenture

            	
              September
                1, 1976

            
	
              Eighth
                Supplemental Indenture

            	
              September
                1, 1977

            
	
              Ninth
                Supplemental Indenture

            	
              April
                1, 1978

            
	
              Tenth
                Supplemental Indenture

            	
              August
                1, 1978

            
	
              Eleventh
                Supplemental Indenture

            	
              December
                1, 1982

            
	
              Twelfth
                Supplemental Indenture

            	
              April
                1, 1987

            
	
              Thirteenth
                Supplemental Indenture

            	
              March
                1, 1992

            
	
              Fourteenth
                Supplemental Indenture

            	
              June
                1, 1992

            
	
              Fifteenth
                Supplemental Indenture

            	
              July
                1, 1992

            
	
              Sixteenth
                Supplemental Indenture

            	
              July
                1, 1992

            
	
              Seventeenth
                Supplemental Indenture

            	
              February
                1, 1993

            
	
              Eighteenth
                Supplemental Indenture

            	
              July
                1, 1993

            
	
              Nineteenth
                Supplemental Indenture

            	
              February
                1, 1997

            
	
              Twentieth
                Supplemental Indenture

            	
              November
                1, 1997

            
	
              Twenty-first
                Supplemental Indenture

            	
              October
                1, 2000

            
	
              Twenty-second
                Supplemental Indenture

            	
              July
                1, 2003

            
	
              Twenty-third
                Supplemental Indenture

            	
              August
                1, 2004

            
	
              Twenty-fourth
                Supplemental Indenture

            	
              March
                1, 2005

            
	
              Twenty-fifth
                Supplemental Indenture

            	
              December
                1, 2005

            
	
              Twenty-sixth
                Supplemental Indenture

            	
              October
                1, 2006

            

    

     

    which
      supplemental indentures were filed and recorded in various official records
      in
      the State of Minnesota; and

     

    WHEREAS,
      the Company has heretofore issued, in accordance with the provisions of the
      Mortgage, as heretofore supplemented, the following series of First Mortgage
      Bonds:

     

    
      	
              Series

            	
              Principal

            	
              Principal

            
	
              Amount

            	
              Amount

            
	
                Issued  

            	
              Outstanding

            
	 	 	 
	
              3-1/8%
                Series due 1975

            	
              $26,000,000

            	
              None

            
	
              3-1/8%
                Series due 1979

            	
              4,000,000

            	
              None

            
	
              3-5/8%
                Series due 1981

            	
              10,000,000

            	
              None

            
	
              4-3/4%
                Series due 1987

            	
              12,000,000

            	
              None

            
	
              6-1/2%
                Series due 1998

            	
              18,000,000

            	
              None

            
	
              8-1/8%
                Series due 2001

            	
              23,000,000

            	
              None

            
	
              10-1/2%
                Series due 2005

            	
              35,000,000

            	
              None

            
	
              8.70%
                Series due 2006

            	
              35,000,000

            	
              None

            
	
              8.35%
                Series due 2007

            	
              50,000,000

            	
              None

            
	
              9-1/4%
                Series due 2008

            	
              50,000,000

            	
              None

            
	
              Pollution
                Control Series A

            	
              111,000,000

            	
              None

            
	
              Industrial
                Development Series A

            	
              2,500,000

            	
              None

            
	
              Industrial
                Development Series B

            	
              1,800,000

            	
              None

            
	
              Industrial
                Development Series C

            	
              1,150,000

            	
              None

            
	
              Pollution
                Control Series B

            	
              13,500,000

            	
              None

            
	
              Pollution
                Control Series C

            	
              2,000,000

            	
              None

            
	
              Pollution
                Control Series D

            	
              3,600,000

            	
              None

            
	
              7-3/4%
                Series due 1994

            	
              55,000,000

            	
              None

            
	
              7-3/8%
                Series due March 1, 1997

            	
              60,000,000

            	
              None

            
	
              7-3/4%
                Series due June 1, 2007

            	
              55,000,000

            	
              None

            
	
              7-1/2%
                Series due August 1, 2007

            	
              35,000,000

            	
              None

            
	
              Pollution
                Control Series E

            	
              111,000,000

            	
              None

            
	
              7%
                Series due March 1, 2008

            	
              50,000,000

            	
              None

            
	
              6-1/4%
                Series due July 1, 2003

            	
              25,000,000

            	
              None

            
	
              7%
                Series due February 15, 2007

            	
              60,000,000

            	
              None

            
	
              6.68%
                Series due November 15, 2007

            	
              20,000,000

            	
              None

            
	
              Floating
                Rate Series due October 20, 2003

            	
              250,000,000

            	
              None

            
	
              Collateral
                Series A

            	
              255,000,000

            	
              None

            
	
              Pollution
                Control Series F

            	
              111,000,000

            	
              111,000,000

            
	
              5.28%
                Series due August 1, 2020

            	
              35,000,000

            	
              35,000,000

            
	
              5.69%
                Series due March 1, 2036

            	
              50,000,000

            	
              50,000,000

            
	
              5.99%
                Series due February 1, 2027

            	
              60,000,000

            	
              60,000,000

            

    

     

    which
      bonds are also hereinafter sometimes called bonds of the First through
      Thirty-second Series, respectively; and

     

    WHEREAS,
      Section 8 of the Mortgage provides that the form of each series of bonds (other
      than the First Series) issued thereunder and of coupons to be attached to coupon
      bonds of such series shall be established by Resolution of the Board of
      Directors of the Company and that the form of such series, as established by
      said Board of Directors, shall specify the descriptive title of the bonds and
      various other terms thereof, and may also contain such provisions not
      inconsistent with the provisions of the Mortgage as the Board of Directors
      may,
      in its discretion, cause to be inserted therein expressing or referring to
      the
      terms and conditions upon which such bonds are to be issued and/or secured
      under
      the Mortgage; and

     

    WHEREAS,
      Section 120 of the Mortgage provides, among other things, that any power,
      privilege or right expressly or impliedly reserved to or in any way conferred
      upon the Company by any provision of the Mortgage, whether such power, privilege
      or right is in any way restricted or is unrestricted, may (to the extent
      permitted by law) be in whole or in part waived or surrendered or subjected
      to
      any restriction if at the time unrestricted or to additional restriction if
      already restricted, and the Company may enter into any further covenants,
      limitations or restrictions for the benefit of any one or more series of bonds
      issued thereunder, or the Company may cure any ambiguity contained therein,
      or
      in any supplemental indenture, or may establish the terms and provisions of
      any
      series of bonds (other than said First Series) by an instrument in writing
      executed and acknowledged by the Company in such manner as would be necessary
      to
      entitle a conveyance of real estate to record in all of the states in which
      any
      property at the time subject to the lien of the Mortgage shall be situated;
      and

     

    WHEREAS,
      the Company now desires to create a new series of bonds and (pursuant to the
      provisions of Section 120 of the Mortgage) to add to its covenants and
      agreements contained in the Mortgage, as heretofore supplemented, certain other
      covenants and agreements to be observed by it and to alter and amend in certain
      respects the covenants and provisions contained in the Mortgage, as heretofore
      supplemented; and

     

    WHEREAS,
      the execution and delivery by the Company of this Twenty-seventh Supplemental
      Indenture, and the terms of the bonds of the Thirty-third Series, hereinafter
      referred to, have been duly authorized by the Board of Directors of the Company
      by appropriate resolutions of said Board of Directors;

     

    NOW,
      THEREFORE, THIS INDENTURE WITNESSETH:

     

    That
      the
      Company, in consideration of the premises and of One Dollar to it duly paid
      by
      the Trustees at or before the ensealing and delivery of these presents, the
      receipt whereof is hereby acknowledged, and in further evidence of assurance
      of
      the estate, title and rights of the Trustees and in order further to secure
      the
      payment of both the principal of and interest and premium, if any, on the bonds
      from time to time issued under the Mortgage, as heretofore supplemented,
      according to their tenor and effect and the performance of all the provisions
      of
      the Mortgage (including any instruments supplemental thereto and any
      modification made as in the Mortgage provided) and of said bonds, hereby
      grants, bargains, sells, releases, conveys, assigns, transfers, mortgages,
      pledges, sets over and confirms (subject, however, to Excepted Encumbrances)
      unto THE BANK OF NEW YORK and DOUGLAS J. MACINNES, as Trustees under the
      Mortgage, and to their successor or successors in said trust, and to said
      Trustees and their successors and assigns forever, all property, real, personal
      and mixed, of the kind or nature specifically mentioned in the Mortgage, as
      heretofore supplemented, or of any other kind or nature acquired by the Company
      after the date of the execution and delivery of the Mortgage, as heretofore
      supplemented (except any herein or in the Mortgage, as heretofore supplemented,
      expressly excepted), now owned or, subject to the provisions of subsection
      (I)
      of Section 87 of the Mortgage, hereafter acquired by the Company (by purchase,
      consolidation, merger, donation, construction, erection or in any other way)
      and
      wheresoever situated, including (without in anywise limiting or impairing by
      the
      enumeration of the same the scope and intent of the foregoing or of any general
      description contained in this Twenty-seventh Supplemental Indenture) all lands,
      power sites, flowage rights, water rights, water locations, water
      appropriations, ditches, flumes, reservoirs, reservoir sites, canals, raceways,
      dams, dam sites, aqueducts, and all other rights or means for appropriating,
      conveying, storing and supplying water; all rights of way and roads; all plants
      for the generation of electricity by steam, water and/or other power; all power
      houses, gas plants, street lighting systems, standards and other equipment
      incidental thereto, telephone, radio and television systems, air-conditioning
      systems and equipment incidental thereto, water works, water systems, steam
      heat
      and hot water plants, substations, lines, service and supply systems, bridges,
      culverts, tracks, ice or refrigeration plants and equipment, offices, buildings
      and other structures and the equipment thereof; all machinery, engines, boilers,
      dynamos, electric, gas and other machines, regulators, meters, transformers,
      generators, motors, electrical, gas and mechanical appliances, conduits, cables,
      water, steam heat, gas or other pipes, gas mains and pipes, service pipes,
      fittings, valves and connections, pole and transmission lines, wires, cables,
      tools, implements, apparatus, furniture and chattels; all municipal and other
      franchises, consents or permits; all lines for the transmission and distribution
      of electric current, gas, steam heat or water for any purpose including towers,
      poles, wires, cables, pipes, conduits, ducts and all apparatus for use in
      connection therewith; all real estate, lands, easements, servitudes, licenses,
      permits, franchises, privileges, rights of way and other rights in or relating
      to real estate or the occupancy of the same and (except as herein or in the
      Mortgage, as heretofore supplemented, expressly excepted) all the right, title
      and interest of the Company in and to all other property of any kind or nature
      appertaining to and/or used and/or occupied and/or enjoyed in connection with
      any property hereinbefore or in the Mortgage, as heretofore supplemented,
      described.

     

    TOGETHER
      WITH all and singular the tenements, hereditaments, prescriptions, servitudes
      and appurtenances belonging or in anywise appertaining to the aforesaid property
      or any part thereof, with the reversion and reversions, remainder and remainders
      and (subject to the provisions of Section 57 of the Mortgage) the tolls, rents,
      revenues, issues, earnings, income, product and profits thereof, and all the
      estate, right, title and interest and claim whatsoever, at law as well as in
      equity, which the Company now has or may hereafter acquire in and to the
      aforesaid property and franchises and every part and parcel
      thereof.

     

    IT
      IS
      HEREBY AGREED by the Company that, subject to the provisions of subsection (I)
      of Section 87 of the Mortgage, all the property, rights, and franchises acquired
      by the Company (by purchase, consolidation, merger, donation, construction,
      erection or in any other way) after the date hereof,
      except any herein or in the Mortgage, as heretofore supplemented, expressly
      excepted, shall be and are as fully granted and conveyed hereby and by the
      Mortgage and as fully embraced within the lien hereof and the lien of the
      Mortgage as if such property, rights and franchises were now owned by the
      Company and were specifically described herein or in the Mortgage and conveyed
      hereby or thereby.

     

    PROVIDED
      that the following are not and are not intended to be now or hereafter granted,
      bargained, sold, released, conveyed, assigned, transferred, mortgaged,
      hypothecated, affected, pledged, set over or confirmed hereunder and are hereby
      expressly excepted from the lien and operation of this Twenty-seventh
      Supplemental Indenture and from the lien and operation of the Mortgage,
      namely:  (1) cash, shares of stock, bonds, notes and other obligations
      and other securities not hereafter specifically pledged, paid, deposited,
      delivered or held under the Mortgage or covenanted so to be; (2) merchandise,
      equipment, apparatus, materials or supplies held for the purpose of sale or
      other disposition in the usual course of business; fuel, oil and similar
      materials and supplies consumable in the operation of any of the properties
      of
      the Company; all aircraft, rolling stock, trolley coaches, buses, motor coaches,
      automobiles and other vehicles and materials and supplies held for the purpose
      of repairing or replacing (in whole or part) any of the same; all timber,
      minerals, mineral rights and royalties; (3) bills, notes and accounts
      receivable, judgments, demands and choses in action, and all contracts, leases
      and operating agreements not specifically pledged under the Mortgage or
      covenanted so to be; the Company’s contractual rights or other interest in or
      with respect to tires not owned by the Company; (4) the last day of the term
      of
      any lease or leasehold which may hereafter become subject to the lien of the
      Mortgage; (5) electric energy, gas, steam, ice, and other materials or products
      generated, manufactured, produced or purchased by the Company for sale,
      distribution or use in the ordinary course of its business; and (6) the
      Company’s franchise to be a corporation; provided, however, that the property
      and rights expressly excepted from the lien and operation of this Twenty-seventh
      Supplemental Indenture and from the lien and operation of the Mortgage in the
      above subdivisions (2) and (3) shall (to the extent permitted by law) cease
      to
      be so excepted in the event and as of the date that either or both of the
      Trustees or a receiver or trustee shall enter upon and take possession of the
      Mortgaged and Pledged Property in the manner provided in Article XIII of the
      Mortgage by reason of the occurrence of a Default as defined in Section 65
      thereof.

     

    TO
      HAVE
      AND TO HOLD all such properties, real, personal and mixed, granted, bargained,
      sold, released, conveyed, assigned, transferred, mortgaged, pledged, set over
      or
      confirmed by the Company as aforesaid, or intended so to be, unto the Trustees
      and their successors and assigns forever.

     

    IN
      TRUST
      NEVERTHELESS, for the same purposes and upon the same terms, trusts and
      conditions and subject to and with the same provisos and covenants as are set
      forth in the Mortgage, as supplemented, this Twenty-seventh Supplemental
      Indenture being supplemental thereto.

     

    AND
      IT IS
      HEREBY COVENANTED by the Company that all the terms, conditions, provisos,
      covenants and provisions contained in the Mortgage, as heretofore supplemented,
      shall affect and apply to the property hereinbefore described and conveyed
      and
      to the estate, rights, obligations and duties of the Company and Trustees and
      the beneficiaries of the trust with respect to said property, and to the
      Trustees and their successors in the trust in the same manner and with the
      same
      effect as if said
      property had been owned by the Company at the time of the execution of the
      Mortgage, and had been specifically and at length described in and conveyed
      to
      said Trustees by the Mortgage as a part of the property therein stated to be
      conveyed.

     

    The
      Company further covenants and agrees to and with the Trustees and their
      successors in said trust under the Mortgage as follows:

     

    ARTICLE
      I

    Thirty-third
      Series of Bonds

     

    SECTION
      1.  There shall be a series of bonds designated “4.86% Series due
      April 1, 2013” (herein sometimes referred to as the “Thirty-third Series”), each
      of which shall also bear the descriptive title “First Mortgage Bond”, and the
      form thereof, which shall be established by Resolution of the Board of Directors
      of the Company, shall contain suitable provisions with respect to the matters
      hereinafter in this Section specified.  Bonds of the Thirty-third
      Series shall be dated as in Section 10 of the Mortgage provided, mature on
      April
      1, 2013, be issued as fully registered bonds in denominations of One Thousand
      Dollars and, at the option of the Company, in any multiple or multiples of
      One
      Thousand Dollars (the exercise of such option to be evidenced by the execution
      and delivery thereof) and bear interest (computed on the basis of a 360-day
      year
      of twelve thirty-day months) at the rate of 4.86% per annum, payable
      semi-annually on April 1 and October 1 of each year, commencing October 1,
      2008,
      the principal of and interest on each said bond to be payable at the office
      or
      agency of the Company in the Borough of Manhattan, The City of New York, in
      such
      coin or currency of the United States of America as at the time of payment
      is
      legal tender for public and private debts.

     

    (I)            Optional
      Prepayment.  The Company may, at its option, upon notice as
      provided below, prepay at any time all, or from time to time any part of, the
      bonds of the Thirty-third Series at 100% of the principal amount so prepaid,
      and
      the Make-Whole Amount determined for the Settlement Date specified by the
      Company in such notice with respect to such principal amount.  The
      Company will give each registered owner of Bonds of the Thirty-third Series
      written notice (by first class mail or such other method as may be agreed upon
      by the Company and such registered owner) of each optional prepayment under
      this
      subsection (I) mailed or otherwise given not less than 30 days and not more
      than
      60 days prior to the date fixed for such prepayment, to each such registered
      owner at his, her or its last address appearing on the registry
      books.  Each such notice shall specify the Settlement Date (which
      shall be a Business Day), the aggregate principal amount of the bonds of the
      Thirty-third Series to be prepaid on such date, the principal amount of each
      bond held by such registered owner to be prepaid (determined in accordance
      with
      subsection (II) of this section), and the interest to be paid on the Settlement
      Date with respect to such principal amount being prepaid, and shall be
      accompanied by a certificate signed by a Senior Financial Officer as to the
      estimated Make-Whole Amount due in connection with such prepayment (calculated
      as if the date of such notice were the date of the prepayment), setting forth
      the details of such computation.  Two Business Days prior to such
      Settlement Date, the Company shall send to each registered owner of bonds of
      the
      Thirty-third Series (by first class mail or by such other method as may be
      agreed upon by the Company and such
      registered owner) a certificate signed by a Senior Financial Officer specifying
      the calculation of such Make-Whole Amount as of the specified Settlement
      Date.  As promptly as practicable after the giving of the notice and
      the sending of the certificates provided in this subsection, the Company shall
      provide a copy of each to the Corporate Trustee.  The Trustees shall
      be under no duty to inquire into, may conclusively presume the correctness
      of,
      and shall be fully protected in relying upon the information set forth in any
      such notice or certificate.  The bonds of the Thirty-third Series are
      not otherwise subject to voluntary or optional prepayment.

     

     (II)           Allocation
      of Partial Prepayments.  In the case of each
      partial prepayment of the bonds of the Thirty-third Series, the principal amount
      of the Bonds of the Thirty-third Series to be prepaid shall be allocated by
      the
      Company among all of the Bonds of the Thirty-third Series at the time
      outstanding in proportion, as nearly as practicable, to the respective unpaid
      principal amounts thereof not theretofore called for prepayment.

     

     (III)           Maturity;
      Surrender, Etc.  In the case of each notice of prepayment of bonds
      of the Thirty-third Series pursuant to this section, if cash sufficient to
      pay
      the principal amount to be prepaid on the Settlement Date (which shall be a
      Business Day), together with interest on such principal amount accrued to such
      date and the applicable Make-Whole Amount, if any, is not paid as agreed upon
      by
      the Company and each registered owner of the affected bonds, or, to the extent
      that there is no such agreement entered into with one or more such owners,
      deposited with the Corporate Trustee on or before the Settlement Date, then
      such
      notice of prepayment shall be of no effect.  If such cash is so paid
      or deposited, such principal amount of the bonds of the Thirty-third Series
      shall be deemed paid for all purposes and interest on such principal amount
      shall cease to accrue.  In case the Company pays any registered owner
      pursuant to an agreement with that registered owner, the Company shall notify
      the Corporate Trustee as promptly as practicable of such agreement and payment,
      and shall furnish the Corporate Trustee with a copy of such agreement; in case
      the Company deposits any cash with the Corporate Trustee, the Company shall
      provide therewith a list of the registered owners and the amount of such cash
      each registered owner is to receive.  The Trustees shall be under no
      duty to inquire into, may conclusively presume the correctness of, and shall
      be
      fully protected in relying upon the information set forth in any such notice,
      list or agreement, and shall not be chargeable with knowledge of any of the
      contents of any such agreement.  Any bond prepaid in full shall be
      surrendered to the Company or the Corporate Trustee for cancellation on or
      before the Settlement Date or, with respect to cash deposited with the Corporate
      Trustee, before payment of such cash by the Corporate Trustee; any bond prepaid
      in part shall be surrendered to the Company or the Corporate Trustee on or
      before the Settlement Date (unless otherwise agreed between the Company and
      the
      registered owner) or, with respect to cash deposited with Corporate Trustee
      before payment of such cash by the Corporate Trustee, for a substitute bond
      in
      the principal amount remaining unpaid.

     

     (IV)           Make-Whole
      Amount.

     

    “Make-Whole
      Amount” means, with respect to any bond of the Thirty-third Series, an amount
      equal to the excess, if any, of the Discounted Value of the Remaining Scheduled
      Payments with respect to the Called Principal of such bond of the Thirty-third
      Series over the amount of such Called Principal,
      provided that the Make-Whole Amount may in no event be less than
      zero.  For the purposes of determining the Make-Whole Amount, the
      following terms have the following meanings:

     

    “Business
      Day” means any day other than a Saturday, a Sunday or a day on which commercial
      banks in New York City are required or authorized to be closed.

     

    “Called
      Principal” means, with respect to any bond of the Thirty-third Series, the
      principal of such bond that is to be prepaid pursuant to subsection (I) of
      this
      section.

     

    “Discounted
      Value” means, with respect to the Called Principal of any bond of the
      Thirty-third Series, the amount obtained by discounting all Remaining Scheduled
      Payments with respect to such Called Principal from their respective scheduled
      due dates to the Settlement Date with respect to such Called Principal, in
      accordance with accepted financial practice and at a discount factor (applied
      on
      the same periodic basis as that on which interest on the bonds of the
      Thirty-third Series is payable) equal to the Reinvestment Yield with respect
      to
      such Called Principal.

     

    “Reinvestment
      Yield” means, with respect to the Called Principal of any bond of the
      Thirty-third Series, 0.5% over the yield to maturity implied by (i) the
      yields reported as of 10:00 a.m. (New York City time) on the second Business
      Day
      preceding the Settlement Date with respect to such Called Principal, on the
      display designated as “Page PX1” (or such other display as may replace Page PX1
      on Bloomberg Financial Markets (“Bloomberg”) or, if Page PX1 (or its successor
      screen on Bloomberg) is unavailable, the Telerate Access Service screen which
      corresponds most closely to Page PX1 for the most recently issued actively
      traded U.S. Treasury securities having a maturity equal to the Remaining Average
      Life of such Called Principal as of such Settlement Date, or (ii) if such
      yields are not reported as of such time or the yields reported as of such time
      are not ascertainable (including by way of interpolation), the Treasury Constant
      Maturity Series Yields reported, for the latest day for which such yields have
      been so reported as of the second Business Day preceding the Settlement Date
      with respect to such Called Principal, in Federal Reserve Statistical Release
      H.15 (519) (or any comparable successor publication) for actively traded U.S.
      Treasury securities having a constant maturity equal to the Remaining Average
      Life of such Called Principal as of such Settlement Date.  Such
      implied yield will be determined, if necessary, by (a) converting U.S.
      Treasury bill quotations to bond equivalent yields in accordance with accepted
      financial practice and (b) interpolating linearly between (1) the
      actively traded U.S. Treasury security with the maturity closest to and greater
      than such Remaining Average Life and (2) the actively traded U.S. Treasury
      security with the maturity closest to and less than such Remaining Average
      Life.  The Reinvestment Yield shall be rounded to the number of
      decimal places as appears in the interest rate of the applicable bond of the
      Thirty-third Series.

     

    “Remaining
      Average Life” means, with respect to any Called Principal, the number of years
      (calculated to the nearest one-twelfth year) obtained by dividing (i) such
      Called Principal into (ii) the sum of the products obtained by multiplying
      (a) the principal component of each Remaining Scheduled Payment with
      respect to such Called Principal by (b) the number of years (calculated to
      the nearest one-twelfth year) that will elapse between the Settlement Date
      with
      respect to such Called Principal and the scheduled due date of such Remaining
      Scheduled Payment.

    “Remaining
      Scheduled Payments” means, with respect to the Called Principal of any Bond of
      the Thirty-third Series, all payments of such Called Principal and interest
      thereon that would be due after the Settlement Date with respect to such Called
      Principal if no payment of such Called Principal were made prior to its
      scheduled due date, provided that if such Settlement Date is not a date on
      which
      interest payments are due to be made under the terms of the Bonds of the
      Thirty-third Series, then the amount of the next succeeding scheduled interest
      payment will be reduced by the amount of interest accrued to such Settlement
      Date and required to be paid on such Settlement Date pursuant to subsection
      (I)
      of this section.

     

    “Settlement
      Date” means, with respect to the Called Principal of any Bond of the
      Thirty-third Series, the date on which such Called Principal is to be prepaid
      pursuant to subsection (I) of this section.

     

    “Senior
      Financial Officer” means the chief financial officer, principal accounting
      officer, treasurer or comptroller of the Company.

     

     (V)            At
      the option of the registered owner, any bonds of the Thirty-third Series, upon
      surrender thereof for cancellation at the office or agency of the Company in
      the
      Borough of Manhattan, The City of New York, together with a written instrument
      of transfer wherever required by the Company duly executed by the registered
      owner or by his duly authorized attorney, shall (subject to the provisions
      of
      Section 12 of the Mortgage) be exchangeable for a like aggregate principal
      amount of bonds of the same series of other authorized
      denominations.

     

    Bonds
      of
      the Thirty-third Series shall be transferable (subject to the provisions of
      Section 12 of the Mortgage) at the office or agency of the Company in the
      Borough of Manhattan, The City of New York.  The Company shall not be
      required to make transfers or exchanges of bonds of the Thirty-third Series
      for
      a period of ten (10) days next preceding any designation of bonds of said series
      to be prepaid, and the Company shall not be required to make transfers or
      exchanges of any bonds of said series designated in whole or in part for
      prepayment.

     

    Upon
      any
      exchange or transfer of bonds of the Thirty-third Series, the Company may make
      a
      charge therefor sufficient to reimburse it for any tax or taxes or other
      governmental charge, as provided in Section 12 of the Mortgage, but the Company
      hereby waives any right to make a charge in addition thereto for any exchange
      or
      transfer of bonds of the Thirty-third Series.

     

    After
      the
      delivery of this Twenty-Seventh Supplemental Indenture and upon compliance
      with
      the applicable provisions of the Mortgage and receipt of consideration therefor
      by the Company, there shall be an initial issue of bonds of the Thirty-third
      Series for the aggregate principal amount of $60,000,000.

    ARTICLE
      II

    Reservation
      of Right to Amend the Mortgage

    

     

    SECTION
      1.  The Company reserves the right, without any vote, consent or other
      action by the holders of Bonds of the Thirty-third Series or any subsequent
      series, to amend the Mortgage, as herein or heretofore supplemented as
      follows:

     

    (A)
      By deleting the words “having its
      principal office and place of business in the Borough of Manhattan, The City
      of
      New York” and the word “such” from Section 35(a).

     

    (B)
      By adding the following at the
      end of the first sentence of Section 101:

     

    “;
      provided however, that if all of the bonds at that time Outstanding are
      registered as to principal and interest or as to principal only, such notice
      shall be sufficiently given if mailed, postage prepaid to each such registered
      owner of bonds at his/her last address appearing on the registry books, on
      or
      before the date of on which the first publication of such notice would otherwise
      have been required.”

     

    ARTICLE
      III

    Miscellaneous
      Provisions

     

    SECTION
      1.  Section 126 of the Mortgage, as heretofore amended, is hereby
      further amended by adding the words “and April 1, 2013,” after the words “and
      February 1, 2027.”

     

    SECTION
      2. Subject to the amendments provided for in this Twenty-seventh Supplemental
      Indenture, the terms defined in the Mortgage, as heretofore supplemented, shall,
      for all purposes of this Twenty-seventh Supplemental Indenture, have the
      meanings specified in the Mortgage, as heretofore supplemented.

     

    SECTION
      3. The holders of bonds of the Thirty-third Series consent that the Company
      may,
      but shall not be obligated to, fix a record date for the purpose of determining
      the holders of bonds of the Thirty-third Series entitled to consent to any
      amendment, supplement or waiver.  If a record date is fixed, those
      persons who were holders at such record date (or their duly designated proxies),
      and only those persons, shall be entitled to consent to such amendment,
      supplement or waiver or to revoke any consent previously given, whether or
      not
      such persons continue to be holders after such record date.  No such
      consent shall be valid or effective for more than 90 days after such record
      date.

     

    SECTION
      4. The Trustees hereby accept the trusts herein declared, provided, created
      or
      supplemented and agree to perform the same upon the terms and conditions herein
      and in the Mortgage set forth and upon the following terms and
      conditions:

    The
      Trustees shall not be responsible in any manner whatsoever for or in respect
      of
      the validity or sufficiency of this Twenty-seventh Supplemental Indenture or
      for
      or in respect of the recitals contained herein, all of which recitals are made
      by the Company solely.  In general, each and every term and condition
      contained in Article XVII of the Mortgage shall apply to and form part of this
      Twenty-seventh Supplemental Indenture with the same force and effect as if
      the
      same were herein set forth in full with such omissions, variations and
      insertions, if any, as may be appropriate to make the same conform to the
      provisions of this Twenty-seventh Supplemental Indenture.

     

    SECTION
      5. Whenever in this Twenty-seventh Supplemental Indenture any party hereto
      is
      named or referred to, this shall, subject to the provisions of Articles XVI
      and
      XVII of the Mortgage, as heretofore supplemented, be deemed to include the
      successors or assigns of such party, and all the covenants and agreements in
      this Twenty-seventh Supplemental Indenture contained by or on behalf of the
      Company, or by or on behalf of the Trustees shall, subject as aforesaid, bind
      and inure to the benefit of the respective successors and assigns of such party
      whether so expressed or not.

     

    SECTION
      6.  Nothing in this Twenty-seventh Supplemental Indenture, expressed
      or implied, is intended, or shall be construed, to confer upon, or give to,
      any
      person, firm or corporation, other than the parties hereto and the holders
      of
      the bonds and coupons Outstanding under the Mortgage, any right, remedy, or
      claim under or by reason of this Twenty-seventh Supplemental Indenture or any
      covenant, condition, stipulation, promise or agreement hereof, and all the
      covenants, conditions, stipulations, promises and agreements in this
      Twenty-seventh Supplemental Indenture contained by and on behalf of the Company
      shall be for the sole and exclusive benefit of the parties hereto, and of the
      holders of the bonds and of the coupons Outstanding under the
      Mortgage.

     

    SECTION
      7. This Twenty-seventh Supplemental Indenture shall be executed in several
      counterparts, each of which shall be an original and all of which shall
      constitute but one and the same instrument.

     

    SECTION
      8. The Company, the mortgagor named herein, by its execution hereof acknowledges
      receipt of a full, true and complete copy of this Twenty-seventh Supplemental
      Indenture.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, ALLETE, Inc. has caused its corporate name to be hereunto
      affixed, and this instrument to be signed and sealed by its President, one
      of
      its Vice Presidents, or its Treasurer, and its corporate seal to be attested
      by
      its Secretary or one of its Assistant Secretaries for and in its behalf, all
      in
      the City of Duluth, Minnesota, and The Bank of New York has caused its corporate
      name to be hereunto affixed, and this instrument to be signed and sealed by
      one
      of its Vice Presidents or one of its Assistant Vice Presidents and its corporate
      seal to be attested by one of its Assistant Treasurers, one of its Vice
      Presidents or one of its Assistant Vice Presidents, and Douglas J. MacInnes
      has
      hereunto set his hand and affixed his seal, all in The City of New York, as
      of
      the day and year first above written.

     

    ALLETE,
      Inc.

     

    By
/s/
      Donald W. Stellmaker    

             Donald
      W.
      Stellmaker

            
      Treasurer                                                    

    Attest:

     

    /s/
      Deborah A. Amberg            
Deborah
      A.
      Amberg

    Sr.
      VP, General Counsel & Secretary

    

    

    

    

    Executed,
      sealed and delivered by ALLETE, Inc.

    in
      the
      presence of:

     

    /s/
      Dawn Garbo                 

     

    /s/
      Jodi Nash                  

     

     

     

    
 

     

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    Trustee’s
      Signature Page Follows

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    THE
      BANK
      OF NEW YORK,

    as
      Trustee

     

    By   
      /s/ Geovanni
      Barris             

    Geovanni
      Barris

    Vice
      President

     

    Attest:

     

    /s/
      Carlos Luciano            

    Carlos
      Luciano

    Vice
      President

     

        /s/
      Douglas J. Macinnes       L.S.

        DOUGLAS
      J.
      MACINNES

     

    Executed,
      sealed and delivered by THE BANK OF NEW

    YORK
      and
      DOUGLAS J. MACINNES in the presence of:

     

    /s/
      Timothy Casey                

        Timothy
      Casey                     
      

    
      

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    Trustee’s
      Signature Page

    

    Twenty-seventh
      Supplemental Indenture dated as of February 1, 2008

    To
      Mortgage and Deed of Trust dated as of September 1, 1945

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    STATE
      OF
      MINNESOTA                               )

    )  SS.:

    COUNTY
      OF
      ST.
      LOUIS                                 )

     

    On
      this 24 day of January, 2008, before me, a Notary Public within and for
      said County, personally appeared Donald W. Stellmaker and Deborah A. Amberg,
      to
      me personally known, who, being each by me duly sworn, did say that they are
      respectively the Treasurerand the Sr.Vice President, General Counsel and
      Secretary of ALLETE, INC., the corporation named in the foregoing instrument;
      that the seal affixed to the foregoing instrument is the corporate seal of
      said
      corporation; that said instrument was signed and sealed in behalf of said
      corporation by authority of its Board of Directors; and said Donald W.
      Stellmaker  and Deborah A. Amberg acknowledged said instrument to be
      the free act and deed of said corporation.

     

    Personally
      came before me on this 24 day of January, 2008, Donald W. Stellmaker to me
      known to be the Treasurer, and Deborah A. Amberg, to me known to be the Sr.Vice
      President, General Counsel and Secretary , of the above named ALLETE, INC.,
      the
      corporation described in and which executed the foregoing instrument, and to
      me
      personally known to be the persons who as such officers executed the foregoing
      instrument in the name and behalf of said corporation, who, being by me duly
      sworn did depose and say and acknowledge that they are respectively the
      Treasurer and the Sr.Vice President, General Counsel and Secretary of said
      corporation; that the seal affixed to said instrument is the corporate seal
      of
      said corporation; and that they signed, sealed and delivered said instrument
      in
      the name and on behalf of said corporation by authority of its Board of
      Directors and stockholders, and said Donald W. Stellmaker and Deborah A. Amberg
      then and there acknowledged said instrument to be the free act and deed of
      said
      corporation and that such corporation executed the same.

     

    On
      the 24
      day of January, 2008, before me personally came Donald W. Stellmaker and
      Deborah A. Amberg, to me known, who, being by me duly sworn, did depose and
      say
      that they respectively reside at 5114 Idlewild Street, Duluth, Minnesota, and
      2738 Northridge Drive, Duluth, Minnesota; that they are respectively
      the Treasurer and the Sr.Vice President, General Counsel and Secretary, of
      ALLETE, INC., one of the corporations described in and which executed the above
      instrument; that they know the seal of said corporation; that the seal affixed
      to said instrument is such corporate seal; that it was so affixed by order
      of
      the Board of Directors of said corporation, and that they signed their names
      thereto by like order.

     

    GIVEN
      under my hand and notarial seal this 24 day of January.

     

     

                                                           /s/
      Jodi Nash        

                                                      Notary
      Public

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    STATE
      OF
      NEW
      YORK                                                 )

    )  SS:

    COUNTY
      OF
      NEW
      YORK                                             )

     

    On
      this
      24 day of January, before me, a Notary Public within and for said County,
      personally appeared Geovanni Barris and Carlos Luciano, to me personally known,
      who, being each by me duly sworn, did say that they are each a Vice President
      of
      THE BANK OF NEW YORK, the corporation named in the foregoing instrument; that
      the seal affixed to the foregoing instrument is the corporate seal of said
      corporation; that said instrument was signed and sealed in behalf of said
      corporation by authority of its Board of Directors; and said Geovanni Barris
      and
      Carlos Luciano acknowledged said instrument to be the free act and deed of
      said
      corporation.

     

    Personally
      came before me on this 24day of January, Geovanni Barris, to me known to be
      a
      Vice President, and Carlos Luciano, known to me to be a Vice President, of
      the
      above named THE BANK OF NEW YORK, the corporation described in and which
      executed the foregoing instrument, and to me personally known to be the persons
      who as such officers executed the foregoing instrument in the name and behalf
      of
      said corporation, who, being by me duly sworn did depose and say and acknowledge
      that they are each a Vice President of said corporation; that the seal affixed
      to said instrument is the corporate seal of said corporation; and that they
      signed, sealed and delivered said instrument in the name and on behalf of said
      corporation by authority of its Board of Directors, and said Geovanni Barris
      and
      Carlos Luciano then and there acknowledged said instrument to be the free act
      and deed of said corporation and that such corporation executed the
      same.

     

    On
      the 24
      day of January, before me personally came Geovanni Barris and Carlos Luciano,
      to
      me known, who, being by me duly sworn, did depose and say that they each reside
      at 101 Barclay Street, 8W, New York, New York 10286; that they are each a Vice
      President of THE BANK OF NEW YORK, one of the corporations described in and
      which executed the above instrument; that they know the seal of said
      corporation; that the seal affixed to said instrument is such corporate seal;
      that it was so affixed by order of the Board of Directors of said corporation,
      and that they signed their names thereto by like order.

     

    GIVEN
      under my hand and notarial seal this 24 day of January.

     

                                                           /s/
      Carlos R
      Luciano            

                                                             Notary
      Public, State of New York

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    STATE
      OF
      NEW
      YORK                                               
  )

    )  SS:

    COUNTY
      OF
      NEW
      YORK                                 )

     

    On
      this
      24 day of January, before me personally appeared DOUGLAS J. MACINNES, to me
      known to be the person described in and who executed the foregoing instrument,
      and acknowledged that he executed the same as his free act and
      deed.

     

    Personally
      came before me this 24 day of January, the above named DOUGLAS J. MACINNES,
      to
      me known to be the person who executed the foregoing instrument, and
      acknowledged the same.

     

    On
      the 24
      day of January, before me personally came DOUGLAS J. MACINNES, to me known
      to be
      the person described in and who executed the foregoing instrument, and
      acknowledged that he executed the same.

     

    GIVEN
      under my hand and notarial seal this 24 day of January.

     

                                                         /s/
      Carlos R Luciano                

    Notary
      Public, State of New York

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