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 EXHIBIT 10.6

 
AGREEMENT
 
 
THIS AGREEMENT is entered into this _16th__ day of August, 2007, between PNM
Resources, Inc., a New Mexico corporation, on its behalf and on behalf of its
affiliates (“PNMR”) and Public Policy Strategy Group LLC, a New Mexico limited
liability company (“Contractor”).
 
WHEREAS, PNMR desires to secure various consulting services on a temporary basis
from Contractor; and
 
WHEREAS, Contractor is willing to provide such services to PNMR on the terms and
conditions described below.
 
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
 
1.           Confidentiality.  Contractor agrees to keep confidential all
“Confidential Information” as defined in this Agreement, which he presently has
or which he may obtain during the term of this Agreement.  Contractor shall not
reveal any Confidential Information to any other person, corporation or entity,
without the prior written consent from an authorized PNMR representative unless
ordered to do so by a court or administrative agency.  If Contractor is ordered
to divulge PNMR’s Confidential Information, Contractor shall promptly notify
PNMR so that it may take steps to protect its Confidential Information.  If PNMR
declines to take steps to protect the Confidential Information, or is
unsuccessful in doing so, Contractor shall divulge only so much of the
Confidential Information in its possession as is necessary to comply the
order.  Contractor shall return or destroy Confidential Information in its
possession at the request of PNMR.  The term “Confidential Information” means
information Contractor has received from PNMR or any of its employees, agents or
representatives and includes all reports, forecasts, contracts, customer or
third party information, confidential commercial information, trade secrets,
business secrets, business, sales or marketing plans, long range plans, sales or
earnings projections or any information that is not available to the general
public.  Contractor understands and agrees that its obligations under this
paragraph will apply as long as the information is not publicly available and
will extend as long as the information is not publicly available even after
expiration of this Agreement.
 
2.           Consulting Services.  Contractor agrees to provide consulting
services to PNMR as requested by senior management regarding strategy and
tactics in the areas of regulatory, communications, legislative and other public
policy related matters.  For purposes of this Agreement, “senior management” is
defined as PNMR’s Chief Executive Officer; Chief Financial Officer; Senior Vice
President, Public Policy and Strategy; and Vice President, Corporate Strategy
and Development.  Consulting services provided under this Agreement shall be
performed by William J. Real (“Real”) unless otherwise agreed to by PNMR.
 
In performing the consulting services under this Agreement, Contractor agrees
that it will follow all PNMR policies and procedures and that it will not
purport to bind PNMR in any manner unless expressly authorized to do so by
senior management.
 
 

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3.           Conflicts of Interest.  Contractor shall avoid conflicts of
interest with PNMR.  Contractor shall refrain from taking positions contrary to
positions held by PNMR.
 
4.           Compensation.  In consideration of the services to be provided to
PNMR, PNMR shall pay to Contractor the sum of $6,000.00 per month plus gross
receipts tax.  Payment shall be made in advance on the 6th day of each month
commencing September 6, 2007.  It is anticipated that consulting services will
be required for an average of forty hours per month, which is less than 20% of
the average level of services performed by Real as an employee of PNMR Services
Company during the immediately preceding 36 months prior to Real’s termination
of full-time employment.  Every three months while this Agreement is in effect,
a determination will be made as to the total number of hours of consulting
services performed during the three-month period.  If the total hours Contractor
has provided consulting services to PNMR exceeds 120 hours during the
three-month period, PNMR shall further compensate Contractor at the rate of
$150.00 per hour for the time spent in excess of 120 hours.  If the total number
of hours of consulting services performed during the three-month period is less
than the sum of 120 hours plus any shortfall carried over from a prior
three-month period, and the shortfall was due to the unavailability of Realm the
shortfall shall be carried over to the next three-month period so that the
further compensation of $150.00 per hour shall not be payable unless the number
of hours exceeds 120 hours plus the prior period shortfalls resulting from the
unavailability of Real.  Contractor shall provide a monthly invoice for the
monthly amount to be paid.  Each invoice after the first invoice, shall identify
the number of hours spent on consulting services for PNMR with a general
description of each matter for which services were rendered.
 
5.           Reimbursement of Expenses.  Reasonable and necessary expenses
incurred by Contactor in performing the consulting services under this Agreement
shall be paid, in addition to the compensation paid pursuant to Section 3. All
requests for reimbursement of expenses incurred must include supporting
documentation as required by PNMR.
 
6.           Term.  This Agreement shall become effective as of September 6,
2007, at 12:01 a.m. and will terminate on September 5, 2008, at 11:59 p.m.
unless earlier terminated by either party upon ninety days written notice.  This
Agreement shall continue in effect on a month to month basis after its
expiration unless either party provides thirty days written notice of
termination of the month to month extensions.  Notwithstanding termination of
this Agreement, the obligations of Section 1 shall continue as long as
Confidential Information does not become public.
 
7.           Independent Contractor.  Prior to the effective date set forth in
Section 6, Real shall terminate his full-time employment with PNMR Services
Company.  From and after the effective date, the relationship between Contractor
and PNMR shall be that of an independent contractor and nothing in this
Agreement will be construed or deemed to create any other relationship.  Without
limiting the foregoing, the relationship between the parties following the
effective date will not be considered to be that of an employer-employee, joint
venture, or partnership.  As an independent contractor, Contractor has the sole
responsibility for paying workers’ compensation insurance premiums, if
applicable, employee benefits (if any), and all similar obligations.  Contractor
shall perform the services called for by this Agreement in the way that
Contractor deems the most feasible or desirable in order to perform and complete
the services in the most efficient manner possible.  Contractor shall be
entirely and solely responsible for his acts while engaged in the performance of
the services and Contractor’s representatives shall not hold themselves out to
be employees of PNMR.  During the term of this Agreement, Real is not entitled
to continue to accrue any employee benefits from PNMR since he is not an
employee of PNMR.  Contractor shall be liable for and shall pay, and shall
indemnify, defend and hold harmless, PNMR from all taxes (including but not
limited to employment/self-employment and withholding taxes) assessed or payable
on all compensation or other monies paid to Contractor pursuant to this
Agreement.
 
 
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8.           Amendment.  No amendment, modification or waiver of the terms or
conditions of this Agreement shall be binding unless it is in writing and signed
by the parties.
 
9.           Choice of Law.  This Agreement shall be governed by and construed
in accordance with the laws of the State of New Mexico without respect to
conflicts of laws provisions.
 
10.           Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be regarded as an original and all of which
shall constitute but one and the same instrument.
 

Public Policy Strategy Group LLC

By:__/s/ Bill Real _____________________

Its:________________________________

PNM Resources, Inc.

By:           /s/ Jeff
Sterba                                                                

Its:           Chairman, President &
CEO                                                                          
 
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