**Exhibit
      4.9**


**EXECUTION
      COPY**







**REMARKETING
      AGREEMENT**




October
      7, 2005




Banc
      of
      America Securities LLC


9
      West
      57th Street


New
      York,
      NY 10019


U.S.
      Bank
      National Association


100
      Wall
      Street, Suite 1600


New
      York,
      NY 10005




Ladies
      and Gentlemen:




This
      Remarketing Agreement is dated as of October 7, 2005 (the **“Agreement”** )
      among
      PNM Resources, Inc., a New Mexico corporation (the **“Company”** ),
      Banc
      of America Securities LLC, as the Remarketing Agent (the **“Remarketing
      Agent”** ),
      and
      U.S. Bank National Association, a national banking association, not individually
      but solely as Purchase Contract Agent (the **“Purchase
      Contract Agent”** )
      and as
      attorney-in-fact of the holders of Purchase Contracts (as defined in the
      Purchase Contract Agreement referred to below).




Section
      1.  Definitions .




(a)  Capitalized
      terms used and not defined in this Agreement shall have the respective meanings
      set forth in the Purchase Contract Agreement, dated as of October 7, 2005,
      between the Company and U.S. Bank National Association, as Purchase Contract
      Agent, as amended from time to time (the **“Purchase
      Contract Agreement”** ).




(b)  As
      used
      in this Agreement, the following terms have the following meanings:




**“Agreement”** has
      the
      meaning set forth in the first paragraph of this agreement.




**“Company”** has the
      meaning set forth in the first paragraph of this Agreement.




**“Depositary”** means a
      clearing agency registered under Section 17A of the Exchange Act that is
      designated by the Company to act as Depositary for the Units.




**“Depositary
      Participant”** means a
      broker, dealer, bank, other financial institution or other Person for whom
      from
      time to time the Depositary effects book-entry transfers and pledges of
      securities deposited with the Depositary.







**“Most
      Recent Agreement”** means
      the
      underwriting agreement to which the Company or Public Service Company of New
      Mexico ( **“PNM”** )
      is a
      party with respect to the issuance and sale by the Company or PNM, as the case
      may be, of its senior unsecured notes or securities comprised in part of its
      senior unsecured notes, which agreement was entered into most recently prior
      to
      the Remarketing Date.




**“Preliminary
      Prospectus”** means
      any preliminary prospectus relating to the Remarketed Senior Notes included
      in
      the Registration Statement or supplementing such Registration Statement pursuant
      to Rule 424(b) under the Securities Act, including the documents incorporated
      by
      reference therein as of the date of such Preliminary Prospectus; and any
      reference to any amendment or supplement to such Preliminary Prospectus shall
      be
      deemed to refer to and include any documents filed after the date of such
      Preliminary Prospectus under the Exchange Act, and incorporated by reference
      in
      such Preliminary Prospectus.




**“Prospectus”** means
      the prospectus relating to the Remarketed Senior Notes included in the
      Registration Statement, in the form in which it was first used by the
      Remarketing Agent to confirm sales of the Remarketed Senior Notes in the
      Remarketing, including the documents incorporated by reference therein as of
      the
      date of such Prospectus; and any reference to any amendment or supplement to
      such Prospectus shall be deemed to refer to and include any documents filed
      after the date of such Prospectus under the Exchange Act, and incorporated
      by
      reference in such Prospectus.




**“Purchase
      Contract Agent”** has the
      meaning set forth in the first paragraph of this Agreement.




**“Registration
      Statement”** means a
      registration statement under the Securities Act of 1933, as amended (the **“Securities
      Act”** )
      prepared by the Company pursuant to **Section
      5** hereunder covering, inter alia, the Remarketing of the Remarketed Senior Notes,
      including all exhibits thereto and the documents incorporated by reference
      in
      the prospectus contained in such registration statement, and any post-effective
      amendments thereto.




**“Remarketed
      Senior Notes”** means
      the Pledged Senior Notes and the Separate Senior Notes, if any, subject to
      Remarketing as identified to the Remarketing Agent by the Purchase Contract
      Agent and the Custodial Agent, respectively, after 11:00 a.m., New York City
      time, on the Business Day immediately preceding the applicable Remarketing
      Date,
      and shall include: (a) (i) in the case of the Initial Remarketing, the Pledged
      Senior Notes and (ii) in the case of the Final Remarketing, the Senior Notes
      of
      the Holders of Corporate Units who have not notified the Purchase Contract
      Agent
      on or prior to 5:00 p.m., New York Time, on the fifth Business Day immediately
      preceding the Purchase Contract Settlement Date of their intention to effect
      a
      Cash Settlement of the related Purchase Contracts pursuant to the terms of
      the
      Purchase Contract Agreement or who have so notified the Purchase Contract Agent
      but failed to make the required cash payment on the fourth Business Day
      immediately preceding the Purchase Contract Settlement Date pursuant to the
      terms of the Purchase Contract Agreement, and (b) the Separate Senior Notes
      of
      the holders of Separate Senior Notes, if any, who have elected to have their
      Separate Senior Notes be remarketed in such Remarketing pursuant to the terms
      of
      the Purchase Contract Agreement.




**“Remarketing”** means
      the remarketing of the Remarketed Senior Notes pursuant to this
      Agreement.




2


**“Remarketing
      Agent”** means
      Banc of America Securities LLC or any successor remarketing agent appointed
      by
      the Company pursuant to **Section
      10** hereof.




**“Remarketing
      Date”** means
      either the Initial Remarketing Date (as defined herein) or the Final Remarketing
      Date (as defined herein), as context requires.




**“Remarketing
      Materials”** means
      the Preliminary Prospectus, the Prospectus or any other information furnished
      by
      the Company to the Remarketing Agent for distribution to investors in connection
      with the Remarketing.




**“Senior
      Notes”** means
      the senior notes due 2010 of the Company.




**“Transaction
      Documents”** means
      this Agreement, the Purchase Contract Agreement, the Pledge Agreement and the
      Indenture, in each case as amended or supplemented from time to
      time.




Section
      2.  Appointment
      and Obligations of the Remarketing Agent .




(a)  The
      Company hereby appoints Banc of America Securities LLC as the exclusive
      Remarketing Agent, and, subject to the terms and conditions set forth herein,
      Banc of America Securities LLC hereby accepts appointment as Remarketing Agent,
      for the purpose of (i) Remarketing the Remarketed Senior Notes on behalf of
      the
      holders thereof, (ii) determining, in consultation with the Company, in the
      manner provided for herein and in the Purchase Contract Agreement and the
      Indenture, the Reset Rate for the Senior Notes, and (iii) performing such other
      duties as are assigned to the Remarketing Agent in the Transaction
      Documents.




(b)  Unless
      a
      Special Event Redemption has occurred prior to such date, on the third Business
      Day immediately preceding August 16, 2008 (the **“Initial
      Remarketing Date”** ),
      the
      Remarketing Agent shall use commercially reasonable efforts to remarket (based
      on the Reset Rate) (the **“Initial
      Remarketing”** )
      the
      Remarketed Senior Notes, at a price (the **“Remarketing
      Price”** )
      equal
      to approximately 100.25% (or, if the Remarketing Agent is unable to remarket
      the
      Remarketed Senior Notes at such a rate, at a rate below 100.25% in the
      discretion of the Remarketing Agent, but in no event less than 100.00%) of
      the
      sum of the Treasury Portfolio Purchase Price and the Separate Senior Notes
      Purchase Price.




(c)  In
      the
      case of a Failed Initial Remarketing and unless a Special Event Redemption
      has
      occurred prior to such date, on the third Business Day immediately preceding
      the
      Purchase Contract Settlement Date (the **“Final
      Remarketing Date”** ),
      the
      Remarketing Agent shall use its commercially reasonable efforts to remarket
      (based on the Reset Rate) (the **“Final
      Remarketing”** )
      the
      Remarketed Senior Notes at a price (the **“Final
      Remarketing Price”** )
      equal
      to approximately 100.25% (or, if the Remarketing Agent is unable to remarket
      the
      Remarketed Senior Notes at such a rate, at a rate below 100.25% in the
      discretion of the Remarketing Agent, but in no event less than 100.00%) of
      the
      aggregate principal amount of the Remarketed Senior Notes being remarketed
      in
      such Final Remarketing. It is understood and agreed that the Remarketing on
      any
      Remarketing Date will be considered successful and no further attempts will
      be
      made if the resulting proceeds are at least 100% of the sum of the Treasury
      Portfolio Purchase Price and the Separate Senior Notes Purchase Price, in the
      case of the Initial Remarketing, and at least 100% of the aggregate principal
      amount of the Remarketed Senior Notes, in the case of the Final
      Remarketing.




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(d)  In
      connection with each Remarketing, the Remarketing Agent shall determine, in
      consultation with the Company, the rate per annum, rounded to the nearest
      one-thousandth (0.001) of one percent per annum, that the Senior Notes should
      bear (the **“Reset
      Rate”** )
      in
      order for the Remarketed Senior Notes to have an aggregate market value equal
      to
      the Remarketing Price or the Final Remarketing Price, as the case may be, and
      that in the sole reasonable discretion of the Remarketing Agent will enable
      it
      to remarket all of the Remarketed Senior Notes at the Remarketing Price or
      Final
      Remarketing Price, as the case may be, in such Remarketing.




(e)  In
      the
      event of a Failed Remarketing or if no Senior Notes are included in Corporate
      Units, and if none of the holders of the Separate Senior Notes elect to have
      Senior Notes be remarketed in such Remarketing, the applicable interest rate
      on
      the Senior Notes will not be reset and will continue to be the Coupon Rate
      set
      forth in the Indenture as supplemented from time to time.




(f)  If,
      by
      4:00 p.m. (New York City time) on the applicable Remarketing Date, (i) the
      Remarketing Agent is unable to remarket all of the Remarketed Senior Notes
      at
      the Remarketing Price or the Final Remarketing Price, as the case may be,
      pursuant to the terms and conditions hereof or (ii) the Remarketing did not
      occur on such Remarketing Date because one of the conditions set forth in **Section
      7** hereof
      was not satisfied, a Failed Remarketing shall be deemed to have occurred, and
      the Remarketing Agent shall so advise, by telephone, the Depositary, the
      Purchase Contract Agent and the Company. Whether or not there has been a Failed
      Remarketing will be determined in the sole reasonable discretion of the
      Remarketing Agent. Promptly following any Failed Remarketing, the Remarketing
      Agent shall return Separate Senior Notes submitted for remarketing, if any,
      to
      the Custodial Agent for distribution to the appropriate Holders.




(g)  In
      the
      event of a Successful Remarketing, by approximately 4:30 p.m. (New York City
      time) on the applicable Remarketing Date, the Remarketing Agent shall advise,
      by
      telephone:




(i)  the
      Depositary, the Purchase Contract Agent and the Company of the Reset Rate
      determined by the Remarketing Agent in such Remarketing and the number of
      Remarketed Senior Notes sold in such Remarketing; and




(ii)  each
      purchaser (or the Depositary Participant thereof) of Remarketed Senior Notes
      of
      the Reset Rate and the number of Remarketed Senior Notes such purchaser is
      to
      purchase; and




(iii)  each
      such
      purchaser to give instructions to its Depositary Participant to pay the purchase
      price on the third Business Day immediately following the date of such
      Successful Remarketing in same-day funds against delivery of the Remarketed
      Senior Notes purchased through the facilities of the Depositary.




4


The
      Remarketing Agent shall also, if required by the Securities Act or the rules
      and
      regulations promulgated thereunder, deliver to each purchaser a Prospectus
      in
      connection with the Remarketing.




(h)  After
      deducting any fees specified in **Section
      4** below,
      the proceeds from a Successful Remarketing (i) with respect to the Senior Notes
      that are components of the Corporate Units, shall be paid to the Collateral
      Agent in accordance with **Sections
      5.07** and **7.05** of the
      Pledge Agreement, as the case may be, and **Section
      5.02** of the
      Purchase Contract Agreement and (ii) with respect to the Separate Senior Notes,
      shall be paid to the Custodial Agent for payment to the holders of such Separate
      Senior Notes in accordance with **Section
      5.02** of the
      Purchase Contract Agreement and **Sections
      5.07** and **7.05** of the
      Pledge Agreement.




(i)  The
      right
      of each holder of Separate Senior Notes or Corporate Units to have Remarketed
      Senior Notes remarketed and sold on any Remarketing Date shall be subject to
      the
      conditions that (i) the Remarketing Agent conducts a Remarketing pursuant to
      the
      terms of this Agreement, (ii) a Special Event Redemption has not occurred prior
      to such Remarketing Date, (iii) the Remarketing Agent is able to find a
      purchaser or purchasers for Remarketed Senior Notes at the Remarketing Price
      or
      the Final Remarketing Price, as the case may be, based on the Reset Rate, and
      (iv) such purchaser or purchasers deliver the purchase price therefor to the
      Remarketing Agent as and when required.




(j)  It
      is
      understood and agreed that the Remarketing Agent shall not have any obligation
      whatsoever to purchase any Remarketed Senior Notes, whether in the Remarketing
      or otherwise, and shall in no way be obligated to provide funds to make payment
      upon tender of Senior Notes for Remarketing or to otherwise expend or risk
      its
      own funds or incur or to be exposed to financial liability in the performance
      of
      its duties under this Agreement, and without limitation of the foregoing, the
      Remarketing Agent shall not be deemed an underwriter of the Remarketed Senior
      Notes. The Company shall similarly not be obligated in any case to provide
      funds
      to make payment upon tender of the Senior Notes for Remarketing.






Section
      3.  Representations
      and Warranties of the Company .
      The
      Company represents and warrants (i) on and as of the date any Remarketing
      Materials are first distributed in connection with the Remarketing (the **“Commencement
      Date”** )
      and
      (ii) on and as of the applicable Remarketing Date that:




(a)  Each
      of
      the representations and warranties of the Company or PNM, as the case may be,
      in
      the Most Recent Agreement are, as to the Company *mutatis* ** *mutandis* (with
      respect to the Remarketed Senior Notes and the circumstances of their
      remarketing), true and correct (with such representations and warranties, as
      so
      modified, being set forth at length in a certificate by the Company as to the
      Company to be delivered pursuant to **Section
      7(a)** hereof).




(b)  The
      Registration Statement, if any, in the form delivered prior to the applicable
      date set forth in the first paragraph of this **Section
      3** or to be
      delivered to the Remarketing Agent, has been declared effective by the
      Securities and Exchange Commission (the **“Commission”** )
      under
      the Securities Act and no stop order suspending the effectiveness of the
      Registration Statement has been issued and no proceeding for that purpose has
      been initiated or, to the best knowledge of the Company, threatened by the
      Commission.




5


(c)  The
      documents incorporated by reference in the Prospectus, if any, at the time
      when
      they were filed with the Commission, complied in all material respects with
      the
      requirements of the Exchange Act and the rules and regulations of the Commission
      thereunder, and, when read together with the other information in the
      Prospectus, if any, at the time the Registration Statement and any amendments
      thereto became effective, and at the Commencement Date, applicable Remarketing
      Date and applicable settlement date, will not contain an untrue statement of
      a
      material fact or omit to state a material fact required to be stated therein
      or
      necessary in order to make the statements therein, in light of the circumstances
      under which they were made, not misleading; *provided* , *however* ,
      that
      this representation and warranty shall not apply to any statements or omissions
      made in reliance upon and in conformity with information relating to the
      Remarketing Agent furnished in writing to the Company by the Remarketing Agent
      or its counsel expressly for use in the Prospectus.




(d)  The
      Registration Statement, if any, complies, and any post-effective amendment
      thereto, any Rule 462(b) Registration Statement and any Remarketing Materials
      (and any amendment or supplement thereto) will comply in all material respects
      with the requirements of the Securities Act and the rules and regulations
      promulgated thereunder, and the Trust Indenture Act, and the Registration
      Statement as amended and supplemented by the Prospectus, any post-effective
      amendment thereto and any Rule 462(b) Registration Statement do not and will
      not, as of the applicable effective date thereof, contain any untrue statement
      of a material fact or omit to state a material fact required to be stated
      therein or necessary to make the statements therein not misleading. The
      Prospectus, if any, as amended or supplemented, as of its date, and any further
      supplements to the Prospectus, as of the applicable filing date as to any such
      supplement and any Remarketing Materials (and any amendment or supplement
      thereto), as of the date of such Remarketing Materials and the Remarketing
      Date,
      do not and will not contain any untrue statement of a material fact or omit
      to
      state a material fact necessary in order to make the statements therein, in
      the
      light of the circumstances under which they were made, not misleading. No
      representation and warranty is made as to any statement of eligibility on Form
      T-1 filed or incorporated by reference as part of the Registration Statement,
      the Prospectus or the Remarketing Materials, or as to statements in or omissions
      from the Registration Statement, the Prospectus or the Remarketing Materials
      made in reliance upon and in conformity with written information furnished
      to
      the Company by the Remarketing Agent.




(e)  This
      Agreement has been duly authorized, executed and delivered by the
      Company.




Section
      4.  Fees .




(a)  In
      the
      event of a Successful Initial Remarketing of the Remarketed Senior Notes, the
      Remarketing Agent will retain from any proceeds of the Successful Remarketing
      as
      a remarketing fee an amount equal to the lesser of (i) 25 basis points (.25%)
      of
      the sum of the Treasury Portfolio Purchase Price and the Separate Senior Note
      Purchase Price and (ii) the amount of the proceeds of such Successful
      Remarketing in excess of the Treasury Portfolio Purchase Price plus the Separate
      Senior Notes Purchase Price; *provided* , *however* ,
      that to
      the extent that such amount is less than 25 basis points of the Treasury
      Portfolio Price plus the Separate Senior Notes Purchase Price, the Company
      shall
      pay an amount, as an additional remarketing fee, to the Remarketing Agent equal
      to such shortfall (such amount, together with the amount in the previous
      sentence, the **“Remarketing
      Fee”** ).




6


(b)  In
      the
      event of a Successful Final Remarketing of the Remarketed Senior Notes, the
      Remarketing Agent will retain from any proceeds of the Successful Final
      Remarketing as a remarketing fee an amount equal to the lesser of (i) 25 basis
      points (.25%) of the aggregate principal amount of the Remarketed Senior Notes
      and (ii) the amount of the proceeds of such Successful Final Remarketing in
      excess of the aggregate principal amount of the Remarketed Senior Notes; *provided* , *however* ,
      that to
      the extent that such amount is less than 25 basis points of the aggregate
      principal amount of the remarketed Pledged Senior Notes and Separate Senior
      Notes, the Company shall pay an amount, as an additional remarketing fee, to
      the
      Remarketing Agent equal to such shortfall (such amount, together with the amount
      in the previous sentence, the **“Final
      Remarketing Fee”** ).




Section
      5.  Covenants
      of the Company .
      If and
      to the extent the Remarketed Senior Notes are required, in connection with
      the
      Remarketing (in the view of counsel, which need not be in the form of a written
      opinion, for either the Remarketing Agent or the Company), to be registered
      under the Securities Act as in effect at the time of the Remarketing, the
      Company covenants and agrees as follows:




(a)  The
      Company shall prepare the Registration Statement and the Prospectus, in a form
      approved by the Remarketing Agent, which approval shall not be unreasonably
      withheld, shall file any such Prospectus pursuant to the Securities Act within
      the period required by the Securities Act and the rules and regulations
      thereunder and shall use reasonable best efforts to cause the Registration
      Statement to be declared effective by the Commission prior to the second
      Business Day immediately preceding the applicable Remarketing Date.




(b)  The
      Company shall file promptly with the Commission any amendment to the
      Registration Statement or the Prospectus or any supplement to the Prospectus
      that may, in the reasonable judgment of the Company or the Remarketing Agent,
      be
      required by the Securities Act or requested by the Commission.




(c)  The
      Company shall advise the Remarketing Agent, promptly after it receives notice
      thereof, of the time when any amendment to the Registration Statement has been
      filed or becomes effective or any supplement to the Prospectus or any amended
      Prospectus has been filed and to furnish the Remarketing Agent with copies
      thereof.




(d)  The
      Company shall file promptly all reports and any definitive proxy or information
      statements required to be filed by the Company with the Commission pursuant
      to
      Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
      of
      the Prospectus and for so long as the delivery of a Prospectus is required
      in
      connection with the offering or sale of the Remarketed Senior
      Notes.




(e)  The
      Company shall advise the Remarketing Agent, promptly after it receives notice
      thereof, of the issuance by the Commission of any stop order or of any order
      preventing or suspending the use of the Prospectus, of the suspension of the
      qualification of any of the Remarketed Senior Notes for offering or sale in
      any
      jurisdiction, of the initiation or




7


threatening
      of any proceeding for any such purpose, or of any request by the Commission
      for
      the amending or supplementing of the Registration Statement or the Prospectus
      or
      for additional information, and, in the event of the issuance of any stop order
      or of any order preventing or suspending the use of any Prospectus or suspending
      any such qualification, to use promptly reasonable best efforts to obtain its
      withdrawal.




(f)  The
      Company shall furnish promptly to the Remarketing Agent such copies of the
      following documents as the Remarketing Agent shall reasonably request: (A)
      conformed copies of the Registration Statement as originally filed with the
      Commission and each amendment thereto (in each case excluding exhibits); (B)
      the
      Preliminary Prospectus and any amended or supplemented Preliminary Prospectus;
      (C) the Prospectus and any amended or supplemented Prospectus; and (D) any
      document incorporated by reference in the Prospectus (excluding exhibits
      thereto); and, if at any time when delivery of a prospectus is required in
      connection with the Remarketing, (i) any event shall have occurred as a result
      of which the Prospectus as then amended or supplemented would include any untrue
      statement of a material fact or omit to state any material fact necessary in
      order to make the statements therein, in the light of the circumstances under
      which they were made when such Prospectus is delivered, not misleading, or
      (ii)
      for any other reason it shall otherwise be necessary during such same period
      to
      amend or supplement the Prospectus or to file under the Exchange Act any
      document incorporated by reference in the Prospectus in order to comply with
      the
      Securities Act or the Exchange Act, to notify the Remarketing Agent and, upon
      its request, to file such document and to prepare and furnish without charge
      to
      the Remarketing Agent and to any dealer in securities as many copies as the
      Remarketing Agent may from time to time reasonably request of an amended or
      supplemented Prospectus that will correct such statement or omission or effect
      such compliance.




(g)  Prior
      to
      filing with the Commission (A) any amendment to the Registration Statement
      or
      supplement to the Prospectus (other than any amendment or supplement resulting
      solely from the incorporation by reference of any report under the Exchange
      Act)
      or (B) any Prospectus pursuant to Rule 424 under the Securities Act, the Company
      shall furnish a copy thereof to the Remarketing Agent and counsel to the
      Remarketing Agent; and shall not file any such amendment or supplement that
      shall be reasonably disapproved by the Remarketing Agent.




(h)  As
      soon
      as practicable, but in any event not later than eighteen months, after the
      effective date of the Registration Statement, the Company shall make “generally
      available to its security holders” an “earnings statement” of the Company and
      its subsidiaries (which need not be audited) complying with Section 11(a) of
      the
      Securities Act and the rules and regulations thereunder (including, at the
      option of the Company, Rule 158 under the Securities Act). The terms **“generally
      available to its security holders”** and **“earnings
      statement”** shall
      have the meanings set forth in Rule 158 under the Securities Act.




(i)  The
      Company shall take such action as the Remarketing Agent may reasonably request
      in order to qualify the Remarketed Senior Notes for offer and sale under the
      securities or “blue sky” laws of such jurisdictions as the Remarketing Agent may
      reasonably request; *provided* that in
      no event shall the Company be required to qualify as a foreign corporation
      or to
      file a general consent to service of process in any jurisdiction or to subject
      itself to taxation or any other obligation in any jurisdiction in which it
      is
      not otherwise subject.




8


(j)  The
      Company shall furnish the Remarketing Agent with such information and documents
      as the Remarketing Agent may reasonably request in connection with the
      transactions contemplated hereby, and to make reasonably available to the
      Remarketing Agent and any accountant, attorney or other advisor retained by
      the
      Remarketing Agent such information that parties would customarily require in
      connection with a due diligence investigation conducted in accordance with
      applicable securities laws and to cause the Company’s officers, directors,
      employees and accountants to participate in all such discussions and to supply
      all such information reasonably requested by any such Person in connection
      with
      such investigation.




Section
      6.  Payment
      of Expenses .
      The
      Company agrees to pay (a) all costs incident to the preparation and printing
      of
      the Registration Statement, if any, any Prospectus and any other Remarketing
      Materials and any amendments or supplements thereto, (b) all costs of
      distributing the Registration Statement, if any, any Prospectus and any other
      Remarketing Materials and any amendments or supplements thereto, (c) any fees
      and expenses of qualifying the Remarketed Senior Notes under the securities
      laws
      of the several jurisdictions as provided in **Section
      5(i)** and of
      preparing, printing and distributing a Blue Sky Memorandum, if any (including
      the reasonable fees and expenses of counsel to the Remarketing Agent), (d)
      all
      other costs and expenses incident to the performance of the obligations of
      the
      Company hereunder and the Remarketing Agent hereunder and (e) the reasonable
      fees and expenses of counsel to the Remarketing Agent in connection with its
      duties hereunder.




Section
      7.  Conditions
      to the Remarketing Agent’s Obligations. The obligations of the Remarketing Agent
      hereunder shall be subject to the following conditions:




(a)  The
      representations and warranties of the Company contained herein shall be true
      and
      correct in all material respects on and as of the applicable Remarketing Date,
      and the Company, the Purchase Contract Agent and the Collateral Agent shall
      have
      performed in all material respects all covenants and agreements contained herein
      or in the Purchase Contract Agreement or Pledge Agreement to be performed on
      their part at or prior to such date.




(b)  There
      shall not have occurred any of the following: (i) Trading generally shall have
      been suspended or materially limited on the New York Stock Exchange, (ii)
      trading of any securities of the Company shall have been materially suspended
      or
      limited on the New York Stock Exchange, (iii) a banking moratorium shall have
      been declared by either Federal or New York State authorities, or (iv) there
      shall have occurred a material adverse change in the financial markets, any
      escalation of hostilities involving the United States or the declaration by
      the
      United States of a national emergency or war, if the effect of any such event
      specified in this clause (b) in the judgment of the Remarketing Agent makes
      it
      impracticable or inadvisable to proceed with the Remarketing or the delivery
      of
      the Remarketed Senior Notes on the terms and in the manner contemplated in
      the
      Transaction Documents.




9


(c)  The
      Prospectus, if any, shall have been filed with the Commission pursuant to Rule
      424(b) in the manner and within the time period required by Rule 424(b) under
      the Securities Act; no stop order suspending the effectiveness of the
      Registration Statement, any Rule 462(b) Registration Statement, or any
      post-effective amendment to the Registration Statement shall be in effect and
      no
      proceedings for such purpose shall have been instituted or threatened by the
      Commission and any request of the Commission for inclusion of additional
      information in the Registration Statement or the Prospectus or otherwise shall
      have been complied with.




(d)  The
      Company shall have furnished to the Remarketing Agent a certificate, dated
      the
      applicable Remarketing Date, of the Chief Financial Officer satisfactory to
      the
      Remarketing Agent stating that: (1) no order suspending the effectiveness of
      the
      Registration Statement, if any, or prohibiting the sale of the Remarketed Senior
      Notes is in effect, and no proceedings for such purpose are pending before
      or,
      to the best knowledge of such officer, threatened by the Commission; (2) the
      representations and warranties of the Company in **Section
      3** are true
      and correct on and as of the applicable Remarketing Date, and the Company has
      performed in all material respects all covenants and agreements contained herein
      to be performed on its part at or prior to such Remarketing Date; and (3) the
      Registration Statement, if any, as of its effective date, did not contain any
      untrue statement of a material fact and did not omit to state any material
      fact
      required to be stated therein or necessary to make the statements therein not
      misleading and the Prospectus or any other Remarketing Material did not, as
      of
      the date of such Prospectus or such Remarketing Material, if any, contain any
      untrue statement of material fact or omit to state a material fact required
      to
      be stated therein or necessary to make the statements therein, in light of
      the
      circumstances under which they were made, not misleading.




(e)  On
      the
      applicable Remarketing Date, the Remarketing Agent shall have received a letter
      addressed to the Remarketing Agent and dated such date, in form and substance
      satisfactory to the Remarketing Agent, from the Company’s independent
      accountants reasonably acceptable to the Remarketing Agent, containing
      statements and information of the type ordinarily included in accountants’
“comfort letters” with respect to the financial statements and certain financial
      information of the Company and its consolidated subsidiaries contained in the
      Remarketing Materials, if any.




(f)  Bracewell
      & Giuliani LLP, or such other counsel reasonably acceptable to the
      Remarketing Agent, shall have furnished to the Remarketing Agent its opinion,
      as
      counsel to the Company, addressed to the Remarketing Agent and dated the
      applicable Remarketing Date, in form and substance reasonably satisfactory
      to
      the Remarketing Agent addressing such matters as are set forth in such counsel’s
      opinion furnished pursuant to the Most Recent Agreement, adapted as necessary
      to
      relate to the securities being remarketed hereunder and to the Remarketing
      Materials, if any, or to any changed circumstances or events occurring
      subsequent to the date of this Agreement, such adaptations being reasonably
      acceptable to counsel to the Remarketing Agent.




(g)  Troutman
      Sanders LLP, or such other counsel reasonably acceptable to the Remarketing
      Agent, shall have furnished to the Remarketing Agent its written opinion, as
      special counsel to the Company, addressed to the Remarketing Agent and dated
      the
      applicable Remarketing Date, in form and substance satisfactory to the
      Remarketing Agent addressing such matters as are set forth in such counsel’s
      opinion furnished pursuant to the Most Recent Agreement.




10


(h)  Counsel
      for the Remarketing Agent shall have furnished to the Remarketing Agent its
      opinion, addressed to the Remarketing Agent and dated the applicable Remarketing
      Date, in form and substance reasonably satisfactory to the Remarketing
      Agent.




(i)  There
      shall not have occurred any downgrading, nor shall any notice have been given
      of
      any intended or potential downgrading or of any review for a possible change
      that does not indicate an improvement, in the rating accorded any of the
      Company’s securities by any **“nationally
      recognized statistical rating organization,”** as such
      term is defined for purposes of Rule 436(g)(2) under the Securities
      Act.




(j)  The
      Senior Notes shall not have been called for redemption following the occurrence
      of a Special Event.




If
      any
      condition specified in this **Section
      7** is not
      satisfied when and as required to be satisfied, this Agreement may be terminated
      by the Remarketing Agent by notice to the Company at any time on or prior to
      the
      applicable Remarketing Date, which termination shall be without liability on
      the
      part of any party to any other party, except that **Sections
      6** , **8** and **9** shall at
      all times be effective and shall survive such termination.




Section
      8.  Indemnification .




(a)
      The
      Company agrees to indemnify and hold harmless the Remarketing Agent, its
      affiliates, their respective officers, directors, employees, representatives
      and
      agents, and each person, if any, who controls the Remarketing Agent within
      the
      meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
      from and against any loss, claim, damage, liability, joint or several, or any
      action in respect thereof to which the Remarketing Agent or any such affiliate
      officer, employee, representative, agent or controlling person may become
      subject, insofar as such loss, claim, damage, liability or action arises out
      of,
      or is based upon, (i) any untrue statement or alleged untrue statement of a
      material fact contained in the Registration Statement, any Preliminary
      Prospectus or the Prospectus, or in any amendment or supplement thereto, or
      (ii)
      the omission or alleged omission to state in the Registration Statement, any
      Preliminary Prospectus, or the Prospectus or in any amendment or supplement
      thereto, in any Remarketing Materials or any amendment or supplement thereto,
      or
      in any Blue Sky Application, any material fact necessary to make the statements
      therein not misleading; and shall reimburse the Remarketing Agent and each
      such
      affiliate, officer, employee, representative, agent or controlling person
      promptly upon demand for any legal or other expenses reasonably incurred by
      the
      Remarketing Agent or any such affiliate, officer, employee, representative
      agent
      or controlling person in damage, liability or action as such expenses are
      incurred; *provided* , *however* ,
      that
      the Company shall not be liable in any such case to the extent that any such
      loss, claim, damage, liability or action arises out of, or is based upon, any
      untrue statement or alleged untrue statement or omission or alleged omission
      made in the Registration Statement, any Preliminary Prospectus or the
      Prospectus, or in any such amendment or supplement, or any other Remarketing
      Materials (or any amendment or supplement thereto), in reliance upon and in
      conformity with the written information furnished to the Company by or on behalf
      of the




11


Remarketing
      Agent concerning the Remarketing Agent specifically for inclusion therein;
      and *provided* , *further* ,
      that
      the Company shall not be liable to the Remarketing Agent under the indemnity
      agreement in this subsection with respect to any Preliminary Prospectus to
      the
      extent that such loss, claim, damaged, liability or action of the Remarketing
      Agent results from the fact that the Remarketing Agent sold the Remarketed
      Senior Notes to a person as to whom it shall be established that such sale
      was
      an initial resale by the Remarketing Agent and there was not sent or given
      to
      such person, if required by law to have been so sent or given, at or prior
      to
      the written confirmation of the sale to such person, a copy of the Prospectus,
      if the Company had previously furnished copies thereof pursuant to **Section
      5(f)** and the
      loss, claim, damage or liability of the Remarketing Agent results from an untrue
      statement or omission of a material fact contained in the Preliminary Prospectus
      which was (i) identified to the Remarketing Agent prior to the furnishing to
      the
      Remarketing Agent of the corrected Prospectus and (ii) corrected in the
      Prospectus. The foregoing indemnity agreement is in addition to any liability
      which the Company may otherwise have to the Remarketing Agent or to any
      affiliate, officer, employee, representative, agent or controlling person of
      the
      Remarketing Agent.




(b)  The
      Remarketing Agent shall indemnify and hold harmless the Company, its affiliates,
      their respective officers, directors, employees, representatives and agents,
      and
      each person, if any, who controls the Company within the meaning of the
      Securities Act or the Exchange Act from and against any loss, claim, damage,
      liability or any action in respect thereof, to which the Company, or any such
      affiliate, director, officer, employee, representative, agent or controlling
      person may become subject, insofar as such loss, claim, damage, liability or
      action arises out of, or is based upon, (i) any untrue or alleged untrue
      statement of a material fact contained in the Registration Statement, any
      Preliminary Prospectus, or the Prospectus (or any amendment or supplement
      thereto), or (ii) the omission or alleged omission to state in the Registration
      Statement, any Preliminary Prospectus, or the Prospectus (or any amendment
      or
      supplement thereto), or any
      material fact necessary to make the statements therein not misleading, but
      in
      each case only to the extent that such untrue statement or alleged untrue
      statement or omission or alleged omission was made in reliance upon and in
      conformity with written information furnished to the Company by the Remarketing
      Agent specifically for inclusion therein; and shall reimburse the Company and
      any such director, officer or controlling person promptly upon demand for any
      legal and other expenses reasonably incurred by the Company or any such
      affiliate, director, officer, employee, representative, agent or controlling
      person in connection with investigating, defending, or preparing to defend
      against any such loss, claim, damage, liability or action as such expenses
      are
      incurred. The Company hereby acknowledges that the only information that the
      Remarketing Agent has furnished to the Company expressly for use in the
      Registration Statement, any Preliminary Prospectus, or the Prospectus is the
      information set forth in a certificate to be provided by the Remarketing Agent
      on or prior to the Remarketing Date.




(c)  Promptly
      after receipt by an indemnified party under this **Section
      8** of
      notice of any claim or the commencement of any action, the indemnified party
      shall, if a claim in respect thereof is to be made against the indemnifying
      party under this **Section
      8** ,
      notify
      the indemnifying party in writing of the claim or commencement of that action; *provided* , *however* ,
      that
      the failure to notify the indemnifying party shall not relieve it from any
      liability which it may have had under this **Section
      8** except
      to the extent it has been materially prejudiced by such failure and, *provided* , *further* ,
      that
      the failure to notify the indemnifying party shall not relieve it




12


from
      any
      liability which it may have to an indemnified party otherwise than under this **Section
      8** .
      If any
      such claim or action shall be brought against an indemnified party, and it
      shall
      notify the indemnifying party thereof, the indemnifying party shall be entitled
      to participate therein and, to the extent that it wishes, jointly with any
      other
      similarly notified indemnifying party, to assume the defense thereof with
      counsel reasonably satisfactory to such indemnified party. After notice from
      the
      indemnifying party to the indemnified party of its election to assume the
      defense of such claim or action, the indemnifying party shall not be liable
      to
      the indemnified party under this **Section
      8** for any
      legal or other expenses subsequently incurred by the indemnified party in
      connection with the defense thereof other than reasonable costs of
      investigation; *provided* , *however* ,
      (1) if
      the defendants in any such action include both the indemnified party and the
      indemnifying party, (2) the indemnifying party shall not have employed counsel
      satisfactory to the indemnified party to represent the indemnified party within
      a reasonable time after notice of the institution of such action, or (3) the
      indemnifying party and the indemnified party shall have mutually agreed to
      the
      retention of such counsel at the expense of the indemnifying party then and
      the
      indemnified party shall have reasonably concluded that a conflict may arise
      between the positions of the indemnifying party and the indemnified party in
      conducting the defense of any such action or that there may be legal defenses
      available to it and/or other indemnified parties which are different from or
      additional to those available to the indemnifying party, then the indemnified
      party or parties shall have the right to select separate counsel to assume
      such
      legal defenses and to otherwise participate in the defense of such action on
      behalf of such indemnified party or parties. Upon receipt of notice from the
      indemnifying party to such indemnified party of such indemnifying party’s
      election so to assume the defense of such action and approval by the indemnified
      party of counsel, the indemnifying party will not be liable to such indemnified
      party in connection with the defense thereof unless the indemnified party shall
      have employed separate counsel in accordance with the proviso to the next
      preceding sentence (it being understood, however, that the indemnifying party
      shall not be liable for the expenses of more than one separate counsel (together
      with local counsel), approved by the indemnifying party (the Remarketing Agent
      in the case of **Section
      8(b)** ,
      representing the indemnified parties who are parties to such action). No
      indemnifying party shall, (i) without the prior written consent of the
      indemnified parties settle or compromise or consent to the entry of any judgment
      with respect to any pending or threatened claim, action, suit or proceeding
      in
      respect of which indemnification or contribution may be sought hereunder
      (whether or not the indemnified parties are actual or potential parties to
      such
      claim or action) unless such settlement, compromise or consent includes an
      unconditional release of each indemnified party from all liability arising
      out
      of such claim, action, suit or proceeding, and contains no statement as to
      fault, or (ii) be liable for any settlement of any such action effected without
      its written consent, but if settled with its written consent or if there be
      a
      final judgment of the plaintiff in any such action, the indemnifying party
      agrees to indemnify and hold harmless any indemnified party from and against
      any
      loss of liability by reason of such settlement or judgment.




Section
      9.  Contribution .
      If the
      indemnification provided for in **Section
      8** is for
      any reason held to be unavailable or insufficient to hold harmless an
      indemnified party under **Section
      8(a)** or **8(b)** in
      respect of any loss, claim, damage or liability, or any action in respect
      thereof, referred to therein, then each indemnifying party shall in lieu of
      indemnifying such indemnified party, contribute to the amount paid or payable
      by
      such indemnified party as a result of such loss, claim, damage or liability,
      or
      action in respect thereof, (i) in such proportion as shall be




13


appropriate
      to reflect the relative benefits received by the Company, on the one hand,
      and
      the Remarketing Agent, on the other hand, from the Remarketing of the Remarketed
      Senior Notes pursuant to this Agreement or (ii) if the allocation provided
      by
      clause (i) above is not permitted by applicable law, in such proportion as
      is
      appropriate to reflect not only the relative benefits referred to in clause
      (i)
      above but also the relative fault of the Company, on the one hand, and the
      Remarketing Agent, on the other hand, with respect to the statements or
      omissions or alleged statements or alleged omissions that resulted in such
      loss,
      claim, damage, or liability (or action in respect thereof), as well as any
      other
      relevant equitable considerations. The relative benefits received by the
      Company, on the one hand, and the Remarketing Agent, on the other hand, with
      respect to the Remarketing of the Remarketed Senior Notes pursuant to this
      Agreement shall be deemed to be in the same respective proportions as the total
      net proceeds from the Remarketing of the Remarketed Senior Notes pursuant to
      this Agreement received by holders of the Remarketed Senior Notes on the one
      hand, and the total Remarketing Fee received by the Remarketing Agent, on the
      other hand, bear to the aggregate Remarketing Price plus an additional
      Remarketing Fee paid by the Company which is not included in the Remarketing
      Price of the Remarketed Senior Notes. The relative fault of the Company, on
      the
      one hand, and the Remarketing Agent, on the other hand, shall be determined
      by
      reference to whether the untrue or alleged untrue statement of a material fact
      or omission or alleged omission to state a material fact relates to information
      supplied by the Company, on the one hand, or the Remarketing Agent, on the
      other
      hand, the intent of the parties and their relative knowledge, access to
      information and opportunity to correct or prevent such statement or
      omission.




The
      Company and the Remarketing Agent agree that it would not be just and equitable
      if the amount of contributions pursuant to this **Section
      9** were
      determined by pro rata allocation or by any other method of allocation which
      does not take account of the equitable considerations referred to
      herein.




The
      amount paid or payable by an indemnified party as a result of the loss, claim,
      damage or liability, or action in respect thereof, referred to in this **Section
      9** shall be
      deemed to include, for purposes of this **Section
      9** ,
      any
      legal or other expenses reasonably incurred by such indemnified party in
      connection with investigating or defending any action or claim.




Notwithstanding
      the provisions of this **Section
      9** ,
      the
      Remarketing Agent shall not be required to contribute any amount in excess
      of
      the amount by which the fees received by it under **Section
      4** exceeds
      the amount of any damages which the Remarketing Agent has otherwise been
      required to pay by reason of such untrue or alleged untrue statement or omission
      or alleged omission. No person guilty of fraudulent misrepresentation (within
      the meaning of Section 11(f) of the Securities Act) shall be entitled to
      contribution from any person who was not guilty of such fraudulent
      misrepresentation. For purposes of this **Section
      9** ,
      each
      officer and employee of the Remarketing Agent and each person, if any, who
      controls the Remarketing Agent within the meaning of Section 15 of the
      Securities Act or Section 20 of the Exchange Act shall have the same rights
      to
      contribution as the Remarketing Agent, and each director of the Company, each
      officer of the Company who signed the Registration Statement, and each person,
      if any, who controls the Company within the meaning of Section 15 of the
      Securities Act or Section 20 of the Exchange Act shall have the same rights
      to
      contribution as the Company.




14




Section
      10.  Resignation
      and Removal of the Remarketing Agent .
      The
      Remarketing Agent may resign and be discharged from its duties and obligations
      hereunder, and the Company may remove the Remarketing Agent, by giving 30 days’
prior written notice, in the case of a resignation, to the Company, the Purchase
      Contract Agent and the Depositary and, in the case of a removal, to the removed
      Remarketing Agent, the Purchase Contract Agent and the Depositary; *provided* , *however* ,
      that no
      such resignation nor any such removal shall become effective until the Company
      shall have appointed at least one nationally recognized broker-dealer as
      successor Remarketing Agent and such successor Remarketing Agent shall have
      entered into a remarketing agreement with the Company and the Purchase Contract
      Agent, in which it shall have agreed to conduct the Remarketing in accordance
      with the Transaction Documents in all material respects.




In
      any
      such case, the Company will use commercially reasonable efforts to appoint
      a
      successor Remarketing Agent and enter into such a remarketing agreement with
      such person as soon as reasonably practicable.




Section
      11.  Dealing
      in Securities .
      The
      Remarketing Agent, when acting as a Remarketing Agent or in its individual
      or
      any other capacity, may, to the extent permitted by law, buy, sell, hold and
      deal in any of the Remarketed Senior Notes, Corporate Units, Treasury Units
      or
      any of the securities of the Company (together, the **“Securities”** ).
      The
      Remarketing Agent may exercise any vote or join in any action which any
      beneficial owner of such Securities may be entitled to exercise or take pursuant
      to the Indenture with like effect as if it did not act in any capacity
      hereunder. The Remarketing Agent, in its individual capacity, either as
      principal or agent, may also engage in or have an interest in any financial
      or
      other transaction with the Company as freely as if it did not act in any
      capacity hereunder.




Section
      12.  Remarketing
      Agent’s Performance; Duty of Care. The duties and obligations of the
      Remarketing Agent shall be determined solely by the express provisions of this
      Agreement and the Transaction Documents. No implied covenants or obligations
      of
      or against the Remarketing Agent shall be read into this Agreement or any of
      the
      Transaction Documents. In the absence of bad faith on the part of the
      Remarketing Agent, the Remarketing Agent may conclusively rely upon any document
      furnished to it, as to the truth of the statements expressed in any of such
      documents. The Remarketing Agent shall be protected in acting upon any document
      or communication reasonably believed by it to have been signed, presented or
      made by the proper party or parties except as otherwise set forth herein. The
      Remarketing Agent, acting under this Agreement, shall incur no liability to
      the
      Company or to any holder of Remarketed Senior Notes in its individual capacity
      or as Remarketing Agent for any action or failure to act, on its part in
      connection with a Remarketing or otherwise, except if such liability is
      judicially determined to have resulted from its failure to comply with the
      material terms of this Agreement or the gross negligence or willful misconduct
      on its part. The provisions of this **Section
      12** shall
      survive the termination of this Agreement and shall survive the resignation
      or
      removal of any Remarketing Agent pursuant to this Agreement.




Section
      13.  Termination.
      This Agreement shall automatically terminate (i) as to the Remarketing Agent
      on
      the effective date of the resignation or removal of the Remarketing Agent
      pursuant to **Section
      10** and (ii)
      on the earlier of (x) any Special Event Redemption Date and (y) the Purchase
      Contract Settlement Date. If this Agreement is terminated pursuant to any of
      the




15


other
      provisions hereof, except as otherwise provided herein, the Company shall not
      be
      under any liability to the Remarketing Agent and the Remarketing Agent shall
      not
      be under any liability to the Company, except that if this Agreement is
      terminated by the Remarketing Agent because of any failure or refusal on the
      part of the Company to comply with the terms or to fulfill any of the conditions
      of this Agreement, the Company will reimburse the Remarketing Agent for all
      of
      its out-of-pocket expenses (including the fees and disbursements of its counsel)
      reasonably incurred by it. **Sections
      8** , **9** and **12** hereof
      shall survive the termination of this Agreement or the resignation or removal
      of
      the Remarketing Agent.




Section
      14.  Notices.
      All statements, requests, notices and agreements hereunder shall be in writing,
      and:




(a)  if
      to the
      Remarketing Agent, shall be delivered or sent by mail, telex or facsimile
      transmission to:




Banc
      of
      America Securities LLC


9
      West
      57th Street


New
      York,
      New York 10019


Telecopier
      No.: (212) 933-2217


Attention:
      Derek Dillon




(b)  if
      to the
      Company, shall be delivered or sent by mail, telex or facsimile transmission
      to
      PNM Resources, Inc., Alvarado Square MS-2704, Albuquerque, New Mexico 87158,
      Telephone No.: (505) 241-2700, Telecopier No.: (505) 241-2369; Attention:
      Treasurer; and




(c)  if
      to the
      Purchase Contract Agent, shall be delivered or sent by mail, telex or facsimile
      transmission to U.S. Bank National Association, 100 Wall Street, Suite 1600,
      New
      York, New York 10005, Telephone No.: (212) 361-2505, Telecopier No.: (212)
      509-3384; Attention: Corporate Trust Administration.




Any
      such
      statements, requests, notices or agreements shall take effect at the time of
      receipt thereof.




16




Section
      15.  Persons
      Entitled to Benefit of Agreement .
      This
      Agreement shall inure to the benefit of and be binding upon each party hereto
      and its respective successors. This Agreement and the terms and provisions
      hereof are for the sole benefit of only those persons, except that (x) the
      representations, warranties, indemnities and agreements of the Company contained
      in this Agreement shall also be deemed to be for the benefit of the Remarketing
      Agent and the person or persons, if any, who control the Remarketing Agent
      within the meaning of Section 15 of the Securities Act and (y) the indemnity
      agreement of the Remarketing Agent contained in **Section
      8** of
      this
      Agreement shall be deemed to be for the benefit of the Company’s directors and
      officers who sign the Registration Statement, if any, and any person controlling
      the Company within the meaning of Section 15 of the Securities Act. Nothing
      contained in this Agreement is intended or shall be construed to give any
      person, other than the persons referred to herein, any legal or equitable right,
      remedy or claim under or in respect of this Agreement or any provision contained
      herein.




Section
      16.  Survival.
      Notwithstanding **Section
      13** ,
      the
      respective indemnities, representations, warranties and agreements of the
      Company and the Remarketing Agent contained in this Agreement or made by or
      on
      behalf of them, respectively, pursuant to this Agreement, shall survive any
      Remarketing and shall remain in full force and effect, regardless of any
      investigation made by or on behalf of any of them or any person controlling
      any
      of them.




Section
      17.  Governing
      Law. This Agreement shall be governed by, and construed in accordance with,
      the laws of New York.




Section
      18.  Counterparts.
      This Agreement may be executed in one or more counterparts and, if executed
      in
      more than one counterpart, the executed counterparts shall each be deemed to
      be
      an original but all such counterparts shall together constitute one and the
      same
      instrument.




Section
      19.  Headings.
      The headings herein are inserted for convenience of reference only and are
      not
      intended to be part of, or to affect the meaning or interpretation of, this
      Agreement.




Section
      20.  Severability.
      If any provision of this Agreement shall be held or deemed to be or shall,
      in
      fact, be invalid, inoperative or unenforceable as applied in any particular
      case
      in any or all jurisdictions because it conflicts with any provisions of any
      constitution, statute, rule or public policy or for any other reason, then,
      to
      the extent permitted by law, such circumstances shall not have the effect of
      rendering the provision in question invalid, inoperative or unenforceable in
      any
      other case, circumstance or jurisdiction, or of rendering any other provision
      or
      provisions of this Agreement invalid, inoperative or unenforceable to any extent
      whatsoever.




Section
      21.  Amendments.
      This Agreement may be amended by an instrument in writing signed by the parties
      hereto. The Company agrees that it will not enter into, cause or permit any
      amendment or modification of the Transaction Documents or any other instruments
      or agreements relating to the Senior Notes or the Corporate Units that would
      in
      any way adversely affect the rights, duties or obligations of the Remarketing
      Agent, without the prior written consent of the Remarketing Agent.




17




Section
      22.  Successors
      and Assigns. The rights and obligations of the Company hereunder may not be
      assigned or delegated to any other Person without the prior written consent
      of
      Banc of America. The rights and obligations of the Remarketing Agent hereunder
      may not be assigned or delegated to any other Person (other than an affiliate
      of
      the Remarketing Agent) without the prior written consent of the
      Company.




Section
      23.  No
      Advisory or Fiduciary Responsibility *.* The
      Company acknowledges and agrees that: (i) the Remarketing pursuant to this
      Agreement, including the determination of the Remarketing Price and the
      Remarketing Fee, is an arm’s-length commercial transaction between the Company,
      on the one hand, and the Remarketing Agent, on the other hand, and the Company
      is capable of evaluating and understanding and understands and accepts the
      terms, risks and conditions of the transactions contemplated by this Agreement;
      (ii) in connection with each transaction contemplated hereby and the process
      leading to such transaction the Remarketing Agent is and has been acting solely
      as a principal and is not the financial advisor, agent or fiduciary of the
      Company, or its affiliates, stockholders, creditors or employees or any other
      party; (iii) the Remarketing Agent has not assumed or will assume an advisory,
      agency or fiduciary responsibility in favor of the with respect to any of the
      transactions contemplated hereby or the process leading thereto (irrespective
      of
      whether the Remarketing Agent has advised or is currently advising the Company
      on other matters) and the Remarketing Agent does not have any obligation to
      the
      Company with respect to the offering contemplated hereby except the obligations
      expressly set forth in this Agreement; (iv) the Remarketing Agent and its
      affiliates may be engaged in a broad range of transactions that involve
      interests that differ from those of the Company and that the Remarketing Agent
      has no obligation to disclose any of such interests by virtue of any advisory,
      agency or fiduciary relationship; and (v) the Remarketing Agent has not provided
      any legal, accounting, regulatory or tax advice with respect to the offering
      contemplated hereby and the Company has consulted its own legal, accounting,
      regulatory and tax advisors to the extent it deemed appropriate.




This
      Agreement supersedes all prior agreements and understandings (whether written
      or
      oral) between the Company and the Remarketing Agent with respect to the subject
      matter hereof. The Company hereby waives and releases, to the fullest extent
      permitted by law, any claims that the Company may have against the Remarketing
      Agent with respect to any breach or alleged breach of agency or fiduciary
      duty.




If
      the
      foregoing correctly sets forth the agreement by and between the Company, the
      Remarketing Agent and the Purchase Contract Agent, please indicate your
      acceptance in the space provided for that purpose below









[REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK;




SIGNATURE
      PAGE FOLLOWS]




18


[SIGNATURE
      PAGE TO REMARKETING AGREEMENT]




Very
      truly yours,




PNM
      RESOURCES, INC.




By:
      _ /s/
      Terry R. Horn _________________


Terry
      R.
      Horn,


Vice
      President, Corporate Secretary, and


Acting
      Chief Financial Officer







CONFIRMED
      AND ACCEPTED:




BANC
      OF
      AMERICA SECURITIES LLC,


not
      individually, but solely as Remarketing Agent




By:
      __ /s/
      Lily Chang _____


Name:
      Lily Chang


Title:
      Principal








U.S.
      BANK
      NATIONAL ASSOCIATION,


not
      individually but solely as Purchase Contract Agent and as attorney-in-fact
      for
      the Holders of the Purchase Contracts




By:
      ____ /s/
      Marlene J. Fahey _____


Name:
      Marlene J. Fahey


Title:
      Vice President




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