**EXHIBIT 99.3**

**EXECUTION COPY**

**REGISTRATION RIGHTS AGREEMENT**

**between**

**PNMRESOURCES, INC.,as Issuer**

**and**

**CASCADEINVESTMENT, L.L.C.,as Initial Holder**

**Dated as of October 7, 2005**

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**TABLEOF CONTENTS**
|        |                                     | **Page** |
|-------------|------------------------------------------|----------|
| SECTION 1.  | Definitions                              | 1        |
| SECTION 2.  | Shelf Registration;  Demand Registration | 5        |
| SECTION 3.  | Piggyback  Registration Rights           | 8        |
| SECTION 4.  | Registration  Procedures                 | 10       |
| SECTION 5.  | Holder's Obligations                     | 15       |
| SECTION 6.  | Registration  Expenses                   | 15       |
| SECTION 7.  | Indemnification and  Contribution        | 16       |
| (a)         | Indemnification by  the Company          | 16       |
| (b)         | Indemnification by  Holders              | 16       |
| (c)         | Conduct of  Indemnification Proceedings  | 17       |
| (d)         | Contribution                             | 18       |
| SECTION 8.  | Information  Requirements                | 19       |
| SECTION 9.  | Purchase Right in  Certain Instances     | 19       |
| SECTION 10. | Miscellaneous                            | 20       |
| (a)         | No Conflicting  Agreements               | 20       |
| (b)         | Amendments and  Waivers                  | 20       |
| (c)         | Notices                                  |          |
| (d)         | Approval of Holders                      | 21       |
| (e)         | Successors and  Assigns                  | 21       |
| (f)         | Counterparts;  Facsimile Execution       | 22       |
| (g)         | Headings                                 | 22       |
| (h)         | Governing Law                            | 22       |
| (i)         | Severability                             | 22       |
| (j)         | Entire Agreement                         | 22       |
| (k)         | Termination                              | 22       |

Exhibit A          Noticeof Registration Statement and Selling Securityholder QuestionnaireExhibit B          Notice of Transfer Pursuant toRegistration StatementExhibit C          Lock up Letter

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This **REGISTRATION RIGHTS AGREEMENT** dated as of October7, 2005 (this "**Agreement**") is between PNM Resources, Inc., a New Mexicocorporation (the "**Company**"), and Cascade Investment, L.L.C., a Washingtonlimited liability company (the "**Initial Holder**").

The Company agrees with the Initial Holder, (i) for itsbenefit as Initial Holder and (ii) for the benefit of the beneficial owners(including the Initial Holder) from time to time of the Registrable Securities (asdefined herein) (each of the foregoing a "**Holder**" and together the "**Holders**"),as follows: 

# SECTION 1.      Definitions.  As used inthis Agreement, the following terms shall have the following meanings: 

"**Affiliate**" means with respect to any specifiedperson, an "affiliate," as defined in Rule 144, of such person.

"**Agreement**" has the meaning set forth in the firstparagraph of this agreement.

"**Amendment Effectiveness Deadline Date**" has themeaning set forth in **Section 2(d)(i)** hereof.

"**Business Day**" means each Monday, Tuesday,Wednesday, Thursday and Friday that is not a day on which banking institutionsin The City of New York are authorized or obligated by law or executive orderto close.  

"**Closing Prices**" has the meaning set forth in **Section9** hereof.

"**Common Stock**" means the shares of common stock, nopar value, of the Company.

**"Company"** has the meaning set forth in the firstparagraph of this Agreement.

"**Current Market Price Per Share**" has the meaningset forth in **Section 9** hereof.

"**Company Registration**" has the meaning set forth in**Section 3(a)** hereof.

"**Deferral Notice**" has the meaning set forth in **Section4(h)** hereof.

"**Deferral Period**" has the meaning set forth in **Section4(h)** hereof.

"**Demand Effectiveness Deadline Date**" means the datethat is 90 days after the Demand Filing Date.

"**Demand Filing Date**" means forty-five (45) daysafter receipt by the Company of the Demand Registration Request.

"**Demand Registration**" means a registration ofRegistrable Common Stock pursuant to the Demand Registration Statement.

"**Demand Registration Request**" has the meaning setforth in **Section 2(e)** hereof.

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"**Demand Registration Statement**" has the meaning setforth in **Section 2(e)** hereof.

"**Effective Time**" means the time at which the SECdeclares the Registration Statement effective or at which the RegistrationStatement otherwise becomes effective.

"**Effectiveness Deadline Date**" has the meaning setforth in **Section 2(a)** hereof.

"**Effectiveness Period**" means the period commencingon the date hereof and ending on the date that all Registrable Securities haveceased to be Registrable Securities.  

"**Exchange Act**" means the Securities Exchange Act of1934, as amended, or any successor Federal statute, and the rules andregulations thereunder, all as the same shall be in effect at the time.  Referenceto a particular section of, or rule or regulation under, the Exchange Act shallinclude a reference to the comparable section, rule or regulation, if any, andas the case may be, of or under the successor Federal statute.

"**Filing Deadline Date**" means the date sixty (60)days after the Shelf Registration Request is received by the Company.

"**Holder**" has the meaning set forth in the secondparagraph of this Agreement.

"**indemnified party**" is defined in **Section 7(c)**.

"**indemnifying party**" is defined in **Section 7(c)**.

"**Indenture**" means the Indenture, dated as of October7, 2005, between the Company and U.S. Bank National Association, as trustee, asamended and supplemented from time to time in accordance with its terms.

"**Initial Holder**" has the meaning set forth in thefirst paragraph of this Agreement. 

"**Initial Shelf Registration Statement**" has themeaning set forth in **Section 2(a)** hereof.

"**Material Event**" has the meaning set forth in **Section4(h)** hereof.

"**Notice and Questionnaire**" means a written noticedelivered to the Company containing substantially the information called for bythe Notice of Registration Statement and Selling Securityholder Questionnaireattached as **Exhibit A** hereto.

"**Notice Holder**" means, on any date, any Holder thathas delivered a Notice and Questionnaire to the Company on or prior to suchdate.

"**Offered Common Stock**" has the meaning set forth in**Section 9** hereof.

**"Piggyback Registration"** has the meaning set forthin **Section 3(a)** hereof.

"**Preferred Shares**" means the Preferred Shares ofthe Company created by the Statement of Resolutions, convertible into shares ofCommon Stock as provided in the Statement of Resolutions.

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"**Prospectus**" means the prospectus included in anyRegistration Statement (including, without limitation, a prospectus thatdiscloses information previously omitted from a prospectus filed as part of aneffective registration statement in reliance upon Rule 430A promulgated underthe Securities Act), as amended or supplemented by any amendment or prospectussupplement, including post-effective amendments, and all materials incorporatedby reference or explicitly deemed to be incorporated by reference in such Prospectus.

"**Purchase Contract Agreement**" means the purchasecontract agreement dated as of October 7, 2005 between the Company and U.S.Bank National Association, as purchase contract agent.

"**Purchase Contract**" shall have the meaningspecified in the Purchase Contract Agreement.

"**Purchase Date**" has the meaning set forth in **Section9** hereof.

"**Purchase Notice**" has the meaning set forth in **Section9** hereof.

"**Registrable Common Stock**" means shares of CommonStock that are Registrable Securities.

"**Registrable Securities**" means (i) the Units, (ii)the Senior Notes, (iii) the Underlying Common Stock, (iv) any other securitiesof the Company currently held by the Initial Holder and (v) any shares ofCommon Stock or other securities convertible into Common Stock issued withrespect to the securities listed in (iii) and (iv) above upon any stockdividend, split or similar event, so long as such securities remain RegistrableSecurities, *provided*, *however*, that a security ceases to be aRegistrable Security when it is no longer a Restricted Security.

"**Registration Statement**" means any registrationstatement of the Company that covers any of the Registrable Securities pursuantto the provisions of this Agreement, including the Prospectus, amendments andsupplements to such registration statement, including post-effectiveamendments, all exhibits and all materials incorporated by reference orexplicitly deemed to be incorporated by reference in such registrationstatement.  

"**Restricted Security**" means (i) the Units, (ii) theSenior Notes, (iii) the Preferred Stock, (iv) the Underlying Common Stock andany shares of Common Stock or other securities convertible into Common Stockissued with respect to the Underlying Common Stock upon any stock dividend,split or similar event, so long as such securities remain RegistrableSecurities, except any security that (x) has been effectively registered underthe Securities Act and sold in a manner contemplated by the RegistrationStatement, or (y) has been transferred in compliance with Rule 144 under theSecurities Act (or any successor provision thereto), is transferable within thevolume limitations of paragraph (e) of such Rule 144 (or any successorprovision) even if aggregated with all other Registrable Securities held by theHolder thereof, or is transferable pursuant to paragraph (k) of such Rule 144(or any successor provision thereto).

"**Rule 144**" means Rule 144 under the Securities Act,as such Rule 144 may be amended from time to time, or any similar rule orregulation hereafter adopted by the SEC.  

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"**Rule 144A**" means Rule 144A under the SecuritiesAct, as such Rule 144A may be amended from time to time, or any similar rule orregulation hereafter adopted by the SEC.  

"**Sales Notice**" has the meaning set forth in **Section5** hereof.

"**SEC**" means the Securities and Exchange Commission.

"**Securities Act**" means the Securities Act of 1933,as amended, or any successor Federal statute, and the rules and regulationsthereunder, all as the same shall be in effect at the time.  Reference to a particularsection of, or rule or regulation under, the Securities Act shall include areference to the comparable section, rule or regulation, if any, and as thecase may be, of or under the successor Federal statute.  

"**Senior Notes**" means the 5.1% Senior Notes due 2010issued pursuant to the Indenture and initially forming a component of theUnits.

"**Shelf Registration Request**" has the meaning setforth in **Section 2(a)** hereof.

"**Shelf Registration Statement**" has the meaning setforth in **Section 2(b)** hereof.

"**Special Counsel**" means Thelen Reid & PriestLLP or one such other successor counsel as shall be specified by the Holders ofa majority of the Registrable Securities, but which may, with the writtenconsent of the Initial Holder (which shall not be unreasonably withheld), beanother nationally recognized law firm experienced in securities law mattersdesignated by the Company, the reasonable fees and expenses of which will bepaid by the Company pursuant to **Section 6** hereof.  For purposes ofdetermining the holders of a majority of the Registrable Securities in thisdefinition, Holders of Units shall be deemed to be the Holders of the number ofshares of Underlying Common Stock which the Purchase Contracts that are acomponent of such Units obligate such Holders to purchase as of the date theconsent is requested.  

"**Statement of Resolutions**" means the Statement ofResolutions Establishing a Series of Preferred Stock of PNM Resources, Inc.adopted by the Board of Directors of the Company on September 28, 2004, to befiled by the Company with the New Mexico Public Regulation Commission prior tothe Purchase Contract Settlement Date (as defined in the Purchase ContractAgreement).

"**Subsequent Shelf Registration Statement**" has themeaning set forth in **Section 2(b)** hereof.

"**Trading Days**" has the meaning set forth in **Section9** hereof.

"**Triggering Notice**" has the meaning set forth in **Section9** hereof.

"**Trust Indenture Act**" means the Trust Indenture Actof 1939, as amended, or any successor Federal statute, and the rules andregulations thereunder, all as the same shall be in effect at the time. Reference to a particular section of, or rule or regulation under, the TrustIndenture Act shall include a reference to the comparable section, rule orregulation, if any, and as the case may be, of or under the successor Federalstatute.  

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"**Underlying Common Stock**" means (i) the CommonStock that Holders of Units are obligated to purchase pursuant to the PurchaseContracts that are a component of such Units and (ii) to the extent that, asprovided in **Section 8.8** of the Unit Purchase Agreement, Preferred Sharesshall have been issued, the Common Stock issuable upon conversion of suchPreferred Shares.

"**Unit Purchase Agreement"**means the Unit PurchaseAgreement dated August 13, 2004, between the Company and the Initial Holder, asmodified by the First Supplement to Unit Purchase Agreement dated June 4, 2005,the Second Supplement to the Unit Purchase Agreement dated July 1, 2005, theThird Supplement to the Unit Purchase Agreement dated August 12, 2005 and theFourth Supplement to the Unit Purchase Agreement dated September 30, 2005.

"**Units**" means the 6.625% Hybrid Income TermSecurity Units of the Company issued to the Initial Holder pursuant to the UnitPurchase Agreement.

SECTION 2.      Shelf Registration; Demand Registration.  (a)  Uponreceipt of a written request from the Initial Holder (a "**Shelf RegistrationRequest**") made not less than 180 days after the date hereof, the Companyshall prepare and file or cause to be prepared and filed with the SEC, notlater than the Filing Deadline Date, a Registration Statement for an offeringto be made on a delayed or continuous basis pursuant to Rule 415 of theSecurities Act relating to (i) the offer and sale of the Registrable Securities(other than Underlying Common Stock issuable upon exercise of the PurchaseContracts) by the Holders from time to time in accordance with the methods ofdistribution elected by such Holders and set forth in such Shelf RegistrationStatement and (ii) the offer and sale by the Company from time to time to theHolders of Purchase Contracts of the Underlying Common Stock issuable uponexercise of Purchase Contracts, (the**"**Initial Shelf RegistrationStatement**").  The Initial Shelf Registration Statement shall be on Form S-3or another appropriate form permitting registration of such RegistrableSecurities for sale in accordance with the methods of distribution set forth inthe Initial Shelf Registration Statement.  The Company shall use its reasonablebest efforts to cause the Initial Shelf Registration Statement to be declaredeffective under the Securities Act by the date that is 90 days after the FilingDeadline Date (the "**Effectiveness Deadline Date**"), and to keep theInitial Shelf Registration Statement (or any Subsequent Shelf RegistrationStatement) continuously effective under the Securities Act until the expirationof the Effectiveness Period.  At the time the Initial Shelf RegistrationStatement is declared effective, each Holder that became a Notice Holder on orprior to the date ten (10) Business Days prior to such time of effectivenessshall be named as a selling securityholder in the Initial Shelf RegistrationStatement and the related Prospectus in such a manner as to permit such Holderto deliver such Prospectus to purchasers of Registrable Securities inaccordance with applicable law.  None of the Company's security holders (otherthan the Holders of Registrable Securities) shall have the right to include anyof the Company's securities in the Shelf Registration Statement.

(b)   If the Initial Shelf Registration Statement or anySubsequent Shelf Registration Statement ceases to be effective for any reasonat any time during the Effectiveness Period (other than because all RegistrableSecurities registered thereunder shall have been resold pursuant thereto orshall have otherwise ceased to be Registrable Securities), the Company shalluse its reasonable best efforts to obtain the prompt withdrawal of any ordersuspending the 

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effectiveness thereof, and in any event shall within thirty (30)days of such cessation of effectiveness amend the Shelf Registration Statementin a manner reasonably expected to obtain the withdrawal of the ordersuspending the effectiveness thereof, or file an additional Shelf RegistrationStatement covering all of the securities that as of the date of such filing are Registrable Securities (a "**Subsequent Shelf Registration Statement**").  Ifa Subsequent Shelf Registration Statement is filed, the Company shall use itsreasonable best efforts to cause the Subsequent Shelf Registration Statement tobecome effective as promptly as is reasonably practicable, but in any event bythe date that is forty-five (45) days after such filing and to keep such SubsequentShelf Registration Statement continuously effective until the expiration of theEffectiveness Period.  As used herein, "**Shelf Registration Statement**"means the Initial Shelf Registration Statement and any Subsequent ShelfRegistration Statement.

(c)    The Company shall supplement and amend the ShelfRegistration Statement if required by the rules, regulations or instructionsapplicable to the registration form used by the Company for such ShelfRegistration Statement, if required by the Securities Act or as necessary toname a Notice Holder as a selling securityholder pursuant to **Section 2(d)**below.

(d)   Each Holder agrees that if such Holder wishes tosell Registrable Securities pursuant to a Shelf Registration Statement andrelated Prospectus, it will do so only in accordance with this **Section 2(d)**and **Sections 4(h)** and**5** of this Agreement.  Following the datethat the Initial Shelf Registration Statement is declared effective, eachHolder wishing to sell Registrable Securities pursuant to a Shelf RegistrationStatement and related Prospectus agrees to deliver a Notice and Questionnaireto the Company at least ten (10) Business Days prior to any intendeddistribution of Registrable Securities under the Shelf Registration Statement. From and after the date the Initial Shelf Registration Statement is declaredeffective, the Company shall, as promptly as practicable after the date aNotice and Questionnaire is delivered pursuant to **Section 10(c)**, and inany event upon the later of (x) fifteen (15) Business Days after such date or(y) fifteen (15) Business Days after the expiration of any Deferral Period ineffect when the Notice and Questionnaire is delivered or put into effect withinfive (5) Business Days of such delivery date:

                                                                 (i)                       if required by applicable law or policy of the SEC staff, filewith the SEC a post-effective amendment to the Shelf Registration Statement orfile a Subsequent Shelf Registration Statement or prepare and, if required byapplicable law, file a supplement to the related Prospectus or a supplement oramendment to any document incorporated therein by reference or file any otherrequired report or document so that the Holder delivering such Notice andQuestionnaire is named as a selling securityholder in a Shelf RegistrationStatement and the related Prospectus in such a manner as to permit such Holderto deliver such Prospectus to purchasers of the Registrable Securities inaccordance with applicable law and, if the Company shall file a post-effectiveamendment to the Shelf Registration Statement or file a Subsequent ShelfRegistration Statement, use its reasonable best efforts to cause suchpost-effective amendment or Subsequent Shelf Registration Statement to bedeclared effective under the Securities Act as promptly as is reasonably practicable,but in any event by the date (the "**Amendment Effectiveness Deadline Date**")that is forty-five (45) days after the date such post-effective amendment or SubsequentShelf Registration Statement is required by this clause to be filed;

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                                                               (ii)                       provide such Holder copies of any documents filed pursuant to **Section2(d)(i)**; and

                                                              (iii)                       notify such Holder as promptly as practicable after theeffectiveness under the Securities Act of any post-effective amendment orsubsequent Shelf Registration Statement filed pursuant to **Section 2(d)(i)**;

*provided*, that if such Notice and Questionnaire isdelivered during a Deferral Period, the Company shall so inform the Holderdelivering such Notice and Questionnaire and shall, to the extent required,take the actions set forth in clauses (i), (ii) and (iii) above upon expirationof the Deferral Period in accordance with **Section 4(h)**.  Notwithstandinganything contained herein to the contrary, (x) the Company shall be under noobligation to name any Holder that is not a Notice Holder as a sellingsecurityholder in any Registration Statement or related Prospectus and (y) theAmendment Effectiveness Deadline Date shall be extended by up to ten (10)Business Days from the expiration of a Deferral Period if such Deferral Periodshall be in effect on the Amendment Effectiveness Deadline Date.

(e)    In the event that the Company shall becomeineligible to use Form S‐3, such that preparation of a Shelf RegistrationStatement would be impracticable, at any time between the Filing Deadline Dateand the expiration of the Effectiveness Period, then:

                                                                (i)                       From and after the later of (A) the Filing Deadline Date and (B)270 days after the date hereof, upon receipt of a written request from theInitial Holder (a "**Demand Registration Request**") to register under theSecurities Act for purposes of a public offering all of the RegistrableSecurities held by all Holders, the Company shall as expeditiously asreasonably possible (but in any event not later than the Demand Filing Dateprepare and file, and use its best efforts to cause to become effective as soonthereafter as practicable (but in no event later than the Demand EffectivenessFiling Date), a Registration Statement (a "**Demand Registration Statement**")under the Securities Act to effect the offering of such Registrable CommonStock in the manner specified in such request.

                                                               (ii)                       Holders shall be entitled to select and retain one or moreinvestment bankers or managers reasonably acceptable to the Company inconnection with any underwritten offerings made pursuant to this **Section 2(e)**.

                                                              (iii)                       Notwithstanding anything to the contrary contained elsewhereherein, the registration rights granted to the Holders in this **Section 2(e)**are expressly subject to the following terms and conditions:

(A)             The Holders, collectively, shall only be entitled to one (1)request to register Registrable Securities under the terms of this Section**2(e)**. A "request" as it is used in this **Section 2(e)(iii)** shall be deemed tohave occurred only upon completion of a requested registration and the subsequentsale of Registrable Common Stock.

(B)             The Company shall be entitled to defer for a reasonable period oftime, but not in excess of ninety (90) days, the filing of any Demand Registration

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Statement otherwise required to be prepared and filed by it under this **Section2(e)** if the Company notifies the Holders, within five (5) business daysafter the Holders requested the registration under this **Section 2(e)**that the Company (i) is at such time conducting or about to conduct anunderwritten public offering of its securities for its own account and theBoard of Directors of the Company determines in good faith that such offeringwould be materially adversely affected by such registration requested by theHolders or (ii) would, in the opinion of its counsel, be required to disclosein such registration statement information not otherwise then required by lawto be publicly disclosed and, in the good faith judgment of the Board ofDirectors of the Company, such disclosure might materially adversely affect anymaterial business transaction or negotiation in which the Company is thenengaged; *provided*, *however*, that the Company shall not bepermitted to so defer the filing of a Registration Statement pursuant to this **Section2(e)(iii)(B)** more than once.  If the Company elects to defer the filing ofa registration statement pursuant to this **Section 2(e)(iii)(B)**, theHolder may withdraw its request, in writing, during the time of such deferraland such request shall not be counted toward the limit set forth in **Section2(e)(iii)(A)**.

(C)             The Holders shall not exercise their rights pursuant to this **Section2(e)** during the shorter of (1) the 30-day period immediately following theeffective date of any registration statement filed by the Company under theSecurities Act (other than on Form S-8 or another similar form) in respect ofan offering or sale of Common Stock (or securities convertible into, orotherwise linked to, Common Stock) of the Company by or on behalf of theCompany if in the written opinion of a nationally recognized investment bankingfirm selected by the Company to act as an underwriter for such Companyoffering, the registration of the Registrable Securities at such time would significantlyimpede the success of the Company's offering or (ii) 90 days following therequest of the Holders to file a Registration Statement pursuant to this **Section2(e)**; *provided*, *however*, that the Company shall not bepermitted to so delay the filing of a Registration Statement pursuant to this **Subsection(C)** on more than one occasion in any period of 365 consecutive days.

SECTION 3.      Piggyback Registration Rights.  (a)  If at any time or from time to time between theFiling Deadline Date and the expiration of the Effectiveness Period the Companyshall propose to register any Common Stock for public sale under the SecuritiesAct (a "**Company**Registration"), the Company shall give the Holdersprompt written notice of the proposed registration and shall include in suchregistration on the same terms and conditions as the other securities includedin such registration such number of shares of Registrable Common Stock as theHolders shall request within five (5) business days after the giving of suchnotice (a **"Piggyback Registration"**); *provided*, *however*,that the Company may at any time prior to the effectiveness of any suchregistration statement, in its sole discretion and without the consent of theHolders, abandon the proposed offering in which the Holders had requested toparticipate (*provided* that the Company gives the Holders prompt noticeof such decision); and *provided**further* that the Holders shall beentitled to withdraw any or all of its shares of Registrable Common Stock to beincluded in a registration statement under this **Section 3(a)** at any timeprior to the date on which the registration statement with respect to suchshares of Underlying 

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Common Stock is declared effective by the SEC.  TheCompany shall be entitled to select the investment bankers and/or managers, ifany, to be retained in connection with any registration referred to in this **Section3(a)**, *provided* such investment bankers and/or managers arereasonably acceptable to the Holders.

(b)   Notwithstanding anything to the contrary containedelsewhere herein, the registration rights granted to Stockholder in **Section3(a)** are expressly subject to the following terms and conditions:

                                                                (i)                       The Company shall not be obligated to include shares of RegistrableCommon Stock in an offering as contemplated by **Section 3(a)** ifthe Company is advised in writing by the managing underwriter or underwritersof such offering (with a copy to the Initial Holder), that the success of suchoffering would in its or their good faith judgment be jeopardized by suchinclusion (after consideration of all relevant factors, including withoutlimitation, the impact of any delay caused by including such shares); *provided*,*however*, that the Company shall in any case be obligated to include suchnumber of shares of Registrable Common Stock in such offering, if any, as suchunderwriter or underwriters shall determine will not jeopardize the success ofsuch offering.

                                                               (ii)                       The Company shall not be obligated to include any shares of UnderlyingCommon Stock in any registration by the Company of any Common Stock inconnection with any merger, acquisition, exchange offer, or any other businesscombination, including any transaction within the scope of Rule 145 promulgatedpursuant to the Securities Act, subscription offer, dividend reinvestment planor stock option or other director or employee incentive or benefit plan.

                                                              (iii)                       The Company shall use all commercially reasonable efforts tocause the managing underwriter or underwriters of a proposed underwrittenoffering to permit the Registrable Common Stock requested to be included in aregistration of Common Stock pursuant to this **Section 3** to be includedon the same terms and conditions as any similar securities included therein. Notwithstanding the foregoing, the Company shall not be required to include theHolders' Registrable Common Stock in such offering unless the Holders acceptthe terms of the underwriting agreement between the Company and the managingunderwriter or underwriters and otherwise complies with the provisions of **Section7** hereof.  If the managing underwriter or underwriters of a proposedunderwritten offering advise the Company in writing that in its or their goodfaith judgment the total amount of securities, including securities requestedto be included in a registration of Common Stock pursuant to this **Section 3**and other similar securities, to be included in such offering is sufficientlylarge to jeopardize the success of such offering, then in such event thesecurities to be included in such offering shall be allocated first to theCompany and then, to the extent that any additional securities can, in the goodfaith judgment of such managing underwriter or underwriters, be sold withoutcreating any such jeopardy to the success of such offering, to the Holdersbased upon the number of shares of Registrable Common Stock requested to beincluded in such registration.

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                                                             (iv)                       In the event that some but less than all of the Holders' sharesof Underlying Common Stock are included in an offering contemplated by aregistration statement pursuant to this **Section 3**, the Holders shallexecute one or more "lockup" letters in the form attached hereto as **ExhibitC**, setting forth an agreement by the Holders not to offer for sale, sell,grant any option for the sale of, or otherwise dispose of, directly orindirectly, any shares of Common Stock, or any securities convertible into orexchangeable into or exercisable for any shares of Common Stock, for a periodof 90 days from the date such offering commences; *provided*, *however*,that if the period of any such "lockup" applicable to the Company or anydirector, officer or affiliate of the Company with respect to any suchregistration statement shall be less than ninety (90) days, then the period oftime applicable to the Holders shall be such lesser period of time.

SECTION 4.      Registration Procedures.  Inconnection with the registration obligations of the Company under **Sections 2**and **3** hereof, during the Effectiveness Period, the Company shall:

(a)      Prepare and file with the SEC a Registration Statement or RegistrationStatements on Form S-3, S-4 or another appropriate form under the SecuritiesAct available for the sale of the Registrable Securities by the Holders thereofin accordance with the intended method or methods of distribution thereof, anduse its reasonable best efforts to cause each such Registration Statement tobecome effective and remain effective as provided herein; provided thatbefore filing any Registration Statement or Prospectus or any amendments orsupplements thereto with the SEC, furnish to the Initial Holder and the SpecialCounsel of such offering, if any, copies of all such documents proposed to befiled prior to the filing of such Registration Statement or amendment theretoor Prospectus or supplement thereto so as to permit the Holder and such SpecialCounsel sufficient time to review and comment upon the same.

(b)   Subject to **Section 4(h)**, prepare and filewith the SEC such amendments and post-effective amendments to each RegistrationStatement as may be necessary to keep such Registration Statement continuouslyeffective for the applicable period specified in **Section 2(a)** or **Section3(a)**; cause the related Prospectus to be supplemented by any required prospectussupplement, and as so supplemented to be filed pursuant to Rule 424 (or anysimilar provisions then in force) under the Securities Act; and use itsreasonable best efforts to comply with the provisions of the Securities Actapplicable to it with respect to the disposition of all securities covered bysuch Registration Statement during the Effectiveness Period in accordance withthe intended methods of disposition by the sellers thereof set forth in suchRegistration Statement as so amended or such Prospectus as so supplemented.

(c)    As promptly as practicable give notice to theNotice Holders, the Initial Holder and the Special Counsel, (i) when any Prospectus,prospectus supplement, Registration Statement or post-effective amendment to aRegistration Statement has been filed with the SEC and, with respect to aRegistration Statement or any post-effective amendment, when the same has been declaredeffective, (ii) of any request, following the effectiveness of the InitialShelf Registration Statement under the Securities Act, by the SEC or any otherfederal or state governmental authority for amendments or supplements to anyRegistration Statement or related Prospectus or for additional information,(iii) of the issuance by the SEC or any other federal or state governmentalauthority of any stop order suspending the effectiveness of any RegistrationStatement or the initiation or threatening of any proceedings for that purpose,(iv) of the receipt 

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by the Company of any notification with respect to thesuspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threateningof any proceeding for such purpose, (v) of the occurrence of, but not thenature of or details concerning, a Material Event and (vi) of the determinationby the Company that a post-effective amendment to a Registration Statement willbe filed with the SEC, which notice may, at the discretion of the Company (oras required pursuant to **Section 4(h)**), state that it constitutes aDeferral Notice, in which event the provisions of **Section 4(h)** shallapply.

(d)   Use its reasonable best efforts to obtain thewithdrawal of any order suspending the effectiveness of a RegistrationStatement or the lifting of any suspension of the qualification (or exemption fromqualification) of any of the Registrable Securities for sale in any jurisdictionin which they have been qualified for sale, in either case at the earliestpossible moment, and provide immediate notice to each Notice Holder and the InitialHolder of the withdrawal of any such order.

(e)    As promptly as practicable furnish to each NoticeHolder, the Special Counsel and the Initial Holder, upon request and withoutcharge, at least one (1) conformed copy of the Registration Statement and anyamendment thereto, including exhibits and all documents incorporated or deemedto be incorporated therein by reference.

(f)    During the Effectiveness Period, deliver to eachNotice Holder, the Special Counsel, if any, and the Initial Holder, in connectionwith any sale of Registrable Securities pursuant to a Registration Statement,without charge, as many copies of the Prospectus or Prospectuses relating tosuch Registrable Securities (including each preliminary prospectus) and anyamendment or supplement thereto as such Notice Holder may reasonably request;and the Company hereby consents (except during such periods that a DeferralNotice is outstanding and has not been revoked) to the use of such Prospectusor each amendment or supplement thereto by each Notice Holder in connectionwith any offering and sale of the Registrable Securities covered by suchProspectus or any amendment or supplement thereto in the manner set forththerein.

(g)    Prior to any public offering of the RegistrableSecurities pursuant to a Registration Statement, use its reasonable bestefforts to register or qualify or cooperate with the Notice Holders and the SpecialCounsel in connection with the registration or qualification (or exemption fromsuch registration or qualification) of such Registrable Securities for offerand sale under the securities or Blue Sky laws of such jurisdictions within theUnited States as any Notice Holder reasonably requests in writing (whichrequest may be included in the Notice and Questionnaire); prior to any publicoffering of the Registrable Securities pursuant to the Shelf RegistrationStatement, use its reasonable best efforts to keep each such registration or qualification(or exemption therefrom) effective during the Effectiveness Period inconnection with such Notice Holder's offer and sale of Registrable Securitiespursuant to such registration or qualification (or exemption therefrom) and doany and all other acts or things reasonably necessary or advisable to enablethe disposition in such jurisdictions of such Registrable Securities in themanner set forth in the relevant Registration Statement and the related Prospectus;*provided* that the Company will not be required to (i) qualify 

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but for this Agreement or (ii) takeany action that would subject it to general service of process in suits or totaxation in any such jurisdiction where it is not then so subject.

(h)    Upon (A) the issuance by the SEC of a stop order suspendingthe effectiveness of any Registration Statement or the initiation ofproceedings with respect to any Registration Statement under Section 9(d) or 9(e)of the Securities Act, (B) the occurrence of any event or the existence of anyfact (a "**Material Event**") as a result of which any RegistrationStatement shall contain any untrue statement of a material fact or omit tostate any material fact required to be stated therein or necessary to make thestatements therein not misleading, or any Prospectus shall contain any untrue statementof a material fact or omit to state any material fact required to be statedtherein or necessary to make the statements therein, in the light of the circumstancesunder which they were made, not misleading, or (C) the occurrence or existenceof any pending corporate development that, in the sole judgment of the Company,makes it appropriate to suspend the availability of any Registration Statementand the related Prospectus in order to avoid a violation of applicablesecurities laws:

                                                                 (i)                       in the case of clause (B) above, subject to the next sentence, aspromptly as reasonably practicable prepare and file, if necessary pursuant toapplicable law, a post-effective amendment to such Registration Statement or a supplementto the related Prospectus or any document incorporated therein by reference orfile any other required document or report that would be incorporated byreference into such Registration Statement and Prospectus so that such RegistrationStatement does not contain any untrue statement of a material fact or omit tostate any material fact required to be stated therein or necessary to make thestatements therein not misleading, and such Prospectus does not contain anyuntrue statement of a material fact or omit to state any material fact requiredto be stated therein or necessary to make the statements therein, in the lightof the circumstances under which they were made, not misleading, as thereafter deliveredto the purchasers of the Registrable Securities being sold thereunder, and, inthe case of a post-effective amendment to a Registration Statement, subject tothe next sentence, use its reasonable best efforts to cause it to be declaredeffective as promptly as is practicable, and

                                                               (ii)                       give notice to the Notice Holders, and the Special Counsel, ifany, that the availability of any Registration Statement is suspended (a "**DeferralNotice**") and, upon receipt of any Deferral Notice, each Notice Holderagrees not to sell any Registrable Securities pursuant to the RegistrationStatement until such Notice Holder's receipt of copies of the supplemented oramended Prospectus provided for in clause (i) above, or until it is advised inwriting by the Company that the Prospectus may be used, and has received copiesof any additional or supplemental filings that are incorporated or deemedincorporated by reference in such Prospectus.

The Company will use its reasonable best efforts to ensurethat the use of the Prospectus may be resumed (x) in the case of clause (A)above, as promptly as is reasonably practicable, (y) in the case of clause (B)above, as soon as, in the sole judgment of the Company, public disclosure ofsuch Material Event would not be prejudicial to or contrary to the interests ofthe Company or, if necessary to avoid unreasonable burden or expense, as soonas reasonably practicable thereafter and (z) in the case of clause (C) above,as soon as in the good faith

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judgment of the Company (after consultation withthe Company's outside legal counsel), such suspension is no longer appropriate. The Company shall be entitled to exercise its right under this **Section 4(h)**to suspend the availability of any Registration Statement or any Prospectus,and any such period during which the availability of the Registration Statementand any Prospectus is suspended (the "**Deferral Period**") shall not exceed45 days; *provided* that the aggregate duration of any Deferral Periodsshall not exceed 45 days in any 90-day period (or 75 days in any 90-day periodin the event of a Material Event pursuant to which the Company has delivered asecond notice as permitted below) or 90 days in any 360-day period; *providedfurther* that in the case of a Material Event relating to an acquisition ora probable acquisition or financing, recapitalization, business combination orother similar transaction, the Company may deliver to Notice Holders a secondnotice to the effect set forth above, which shall have the effect of extendingthe Deferral Period by up to an additional 30 days, or such shorter period oftime as is specified in such second notice.  Each Notice Holder agrees to holdany notice by the Company in respect of any Deferral Period or Material Eventdescribed in the last clause of the preceding sentence in confidence. 

(i)     Comply in all material respects with allapplicable rules and regulations of the SEC and make generally available to itssecurityholders earning statements (which need not be audited) satisfying theprovisions of Section 11(a) of the Securities Act and Rule 158 thereunder (orany similar rule promulgated under the Securities Act) for a 12-month periodcommencing on the first day of the first fiscal quarter of the Companycommencing after the effective date of a Registration Statement, whichstatements shall be made available no later than 45 days after the end of the12-month period or 90 days if the 12-month period coincides with the fiscalyear of the Company.

(j)    Cooperate with each Notice Holder to facilitatethe timely preparation and delivery of certificates representing Registrable Securitiessold or to be sold pursuant to a Registration Statement, which certificatesshall not bear any restrictive legends, and cause such Registrable Securitiesto be in such denominations as are permitted by the Purchase Contract Agreement,Indenture or the Company's certificate of incorporation and by-laws, asapplicable, and registered in such names as such Notice Holder may request inwriting at least one (1) Business Day prior to any sale of such RegistrableSecurities.

(k)   Provide a CUSIP number for all RegistrableSecurities covered by each Registration Statement not later than the effective dateof such Registration Statement and provide the transfer agent for the Company'sCommon Stock with printed certificates for the Registrable Securities that arein a form eligible for deposit with The Depository Trust Company.

(l)     Not later than the Effective Time of theRegistration Statement, the Company shall cause the Indenture to be qualifiedunder the Trust Indenture Act; in connection with such qualification, theCompany shall cooperate with the Trustee under the Indenture and the Holders(as defined in the Indenture) to effect such changes to the Indenture as may berequired for such Indenture to be so qualified in accordance with the terms ofthe Trust Indenture Act; and the Company shall execute, and shall use allreasonable best efforts to cause the Trustee to execute, all documents that maybe required to effect such changes and all other forms and documents requiredto be filed with the Commission to enable such Indenture to be so qualified ina timely manner. In the event that any such amendment or modification referredto in this **Section 4(l)**

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involves the appointment of a new trustee underthe Indenture, the Company shall appoint a new trustee thereunder pursuant tothe applicable provisions of the Indenture.

(m)   The Company will use its best efforts to cause theUnderlying Common Stock (and, if so requested by the Initial Holder, the Units)to be listed on the New York Stock Exchange or other stock exchange or tradingsystem on which the Common Stock primarily trades on or prior to the EffectiveTime of the Shelf Registration Statement hereunder.

(n)    Cooperate and assist in any filings required to bemade with the National Association of Securities Dealers, Inc.

(o)   Upon (i) the filing of the Initial ShelfRegistration Statement and (ii) the effectiveness of the Initial ShelfRegistration Statement, announce the same, in each case by release to Reuters EconomicServices and Bloomberg Business News.

(p)   Use commercially reasonable efforts to cause theRegistrable Securities to be registered with or approved by such othergovernmental authorities as may be necessary to enable the Holder or Holdersthereof to consummate the distribution of the Registrable Securities;

(q)   Enter into such customary agreements (including anunderwriting agreement in customary form), which may include indemnificationprovisions in favor of underwriters and other persons in addition to, or insubstitution for the provisions of **Section 7** hereof, and take such otheractions as the Holders or the underwriters, if any, reasonably request in orderto expedite or facilitate the distribution of such Registrable Securities;

(r)    Obtain a "cold comfort" letter or letters from theCompany's independent public accountants in customary form and covering mattersof the type customarily covered by "cold comfort" letters as the Holders ofsuch Registrable Securities shall reasonably request;

(s)    Make available for inspection by any Holder, byany underwriter participating in any distribution to be effected pursuant tothe Registration Statement and by any attorney, accountant or other agentretained by any such Holder or any such underwriter all pertinent financial andother records, pertinent corporate documents and properties of the Company, andcause all of the Company's officers, directors and employees to supply all informationreasonably requested by any such Holder, underwriter, attorney, accountant oragent in connection with such Registration Statement;

(t)    Use the Company's best efforts to obtain fordelivery to the Holders and to the managing underwriter or agent, if any, anyopinion or opinions from counsel for the Company reasonably requested by anyHolder and in customary form and in form, substance and scope reasonablysatisfactory to such Holders, the managing underwriter or agent and their counsel;

(u)    Use the Company's best efforts to make availablethe executive officers of the Company to participate with the Holders ofRegistrable Securities and any underwriters in any "road shows" or otherselling efforts that may be reasonably requested by the Holders in connectionwith the methods of distribution for the Registrable Securities;

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(v)    Notwithstanding any other provisions of thisAgreement, the Company shall not be obligated to participate in more than oneunderwritten offering during the period that any Registration Statement isrequired to be effective pursuant to this Agreement, and if an underwrittenoffering pursuant to a Registration Statement is withdrawn or abandoned at therequest of any Holder after the Shelf Registration, Demand Registration orPiggyback Registration has been requested by the Holders, the Company shall notbe obligated to participate in any further underwritten offerings during theperiod that any Registration Statement is required to be effective pursuant tothis Agreement.

SECTION 5.      Holder's Obligations.  EachHolder agrees, by acquisition of the Registrable Securities, that no Holdershall be entitled to sell any of such Registrable Securities pursuant to a ShelfRegistration Statement or to receive a Prospectus relating thereto, unless suchHolder has furnished the Company with a Notice and Questionnaire as requiredpursuant to **Section 2(d)** hereof (including the information required tobe included in such Notice and Questionnaire and the information set forth inthe next sentence and a sales notice (a "**Sales Notice**") setting forththe amount of Registrable Securities to be sold and the proposed sales date notlater than five (5) Business Days prior to the proposed sales date). 

Each Notice Holder agrees promptly to furnish to theCompany all information required to be disclosed in order to make theinformation previously furnished to the Company by such Notice Holder notmisleading and any other information regarding such Notice Holder and thedistribution of such Registrable Securities as the Company may from time totime reasonably request.  

Each Holder acknowledges and agrees that a Sales Noticewill only be valid for a period of five (5) Business Days commencing with theproposed sales date and that if any of the Registrable Securities to which suchSales Notice relates are not sold during such period, a new Sales Notice willneed to be submitted to the Company not later than three (3) Business Daysprior to the new proposed sales date.  Notwithstanding the foregoing, no SalesNotice may be submitted, or if submitted will be of no force and effect, and noRegistrable Securities may be sold pursuant to the Shelf Registration Statementif a Deferral Period is then in effect.  

SECTION 6.      Registration Expenses.  TheCompany shall bear all fees and expenses incurred in connection with or thatare otherwise incidental to the performance by the Company of its obligationsunder **Sections 2**, **3** and **4** of this Agreement whether or notany Registration Statement is declared effective.  Such fees and expenses shallinclude, without limitation, (i) all registration and filing fees (including,without limitation, fees and expenses (x) with respect to filings required tobe made with the National Association of Securities Dealers, Inc. and (y) ofcompliance with federal and state securities or Blue Sky laws (including,without limitation, reasonable and documented fees and disbursements of theSpecial Counsel in connection with Blue Sky qualifications of the RegistrableSecurities under the laws of such jurisdictions as Notice Holders may designatepursuant to **Section 4(g)** of this Agreement and any filings required tobe made with the National Association of Securities Dealers, Inc.), (ii)printing expenses (including, without limitation, expenses of printingcertificates for Registrable Securities in a form eligible for deposit with TheDepository Trust Company), (iii) duplication expenses relating to copies of anyRegistration Statement or Prospectus delivered to any Holders hereunder, (iv)reasonable and documented fees and disbursements of counsel for the Company 

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andof Special Counsel in connection with any Registration Statement, (v)reasonable and documented fees and disbursements of the registrar and transferagent for the classes of the Company's securities to which the RegistrableSecurities belong and (vi) any Securities Act liability insurance obtained bythe Company in its sole discretion.  In addition, the Company shall pay theinternal expenses of the Company (including, without limitation, all salariesand expenses of officers and employees performing legal or accounting duties),the expense of any annual audit, the fees and expenses incurred in connectionwith the listing by the Company of the Registrable Securities on any securitiesexchange on which similar securities of the Company are then listed and thefees and expenses of any person, including special experts, retained by theCompany.  Notwithstanding the provisions of this **Section 6**, each sellerof Registrable Securities shall pay selling expenses, including anyunderwriting discount and commissions, and all registration expenses to theextent required by applicable law.  

SECTION 7.       Indemnificationand Contribution.  

(a)      Indemnification by the Company.  The Company agrees to indemnifyand hold harmless each Holder, each person, if any, who controls any Holderwithin the meaning of either Section 15 of the Securities Act or Section 20 ofthe Exchange Act, and each affiliate of any Holder within the meaning of Rule405 under the Securities Act from and against any and all losses, claims,damages and liabilities (including, without limitation, reasonable legal fees orother expenses reasonably incurred in connection with defending orinvestigating any such action or claim) caused by any untrue statement oralleged untrue statement of a material fact contained in any RegistrationStatement or any amendment thereof, any preliminary prospectus or the Prospectus(as amended or supplemented if the Company shall have furnished any amendmentsor supplements thereto), caused by any omission or alleged omission to statetherein a material fact required to be stated therein or necessary to make thestatements therein not misleading in light of the circumstances in which theyare made, except insofar as such losses, claims, damages or liabilities arecaused by any such untrue statement or omission or alleged untrue statement oromission based upon information relating to any Holder furnished to the Companyin writing by such Holder expressly for use therein; *provided* that theindemnification contained in this paragraph shall not inure to the benefit ofany Holder (or to the benefit of any such affiliate of such Holder within themeaning of Rule 405 under the Securities Act) on account of any such losses,claims, damages or liabilities caused by any untrue statement or alleged untruestatement or omission or alleged omission made in any preliminary prospectus ifthe Company has performed its obligations under **Section 4** hereof and if(x) such Holder failed to send or deliver a copy of the Prospectus with orprior to the delivery of written confirmation of the sale by such Holder to theperson asserting the claim from which such losses, claims, damages orliabilities arise and (y) the Prospectus would have corrected such untruestatement or alleged untrue statement or such omission or alleged omission. 

(b)      Indemnification by Holders.  Each Holder agrees severally andnot jointly to indemnify and hold harmless the Company and its directors, itsofficers and each person, if any, who controls the Company (within the meaningof either Section 15 of the Securities Act or Section 20 of the Exchange Act)and each affiliate of the Company within the meaning of Rule 405 under theSecurities Act or any other Holder, to the same extent as the foregoingindemnity from the Company to such Holder, but only with reference toinformation relating to such Holder furnished to the Company in writing by suchHolder expressly for use in such Registration

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Statement or Prospectus oramendment or supplement thereto.  In no event shall the liability of any Holderhereunder be greater in amount than the dollar amount of the net proceedsreceived by such Holder upon the sale of the Registrable Securities pursuant tothe Registration Statement giving rise to such indemnification obligation. 

(c)      Conduct of Indemnification Proceedings.  In case anyproceeding (including any governmental investigation) shall be institutedinvolving any person in respect of which indemnity may be sought pursuant to **Section7(a)** or **7(b)** hereof, such person (the "**indemnified party**")shall promptly notify the person against whom such indemnity may be sought (the"**indemnifying party**") in writing and the indemnifying party, uponrequest of the indemnified party, shall retain counsel reasonably satisfactoryto the indemnified party to represent the indemnified party and any others theindemnifying party may designate in such proceeding and shall pay thereasonable fees and disbursements of such counsel related to such proceeding.  Inany such proceeding, any indemnified party shall have the right to retain itsown counsel, but the fees and expenses of such counsel shall be at the expenseof such indemnified party unless (i) the indemnifying party and the indemnifiedparty shall have mutually agreed to the retention of such counsel or (ii) thenamed parties to any such proceeding (including any impleaded parties) includeboth the indemnifying party and the indemnified party and representation ofboth parties by the same counsel would be inappropriate due to actual orpotential differing interests between them.  It is understood that theindemnifying party shall not, in respect of the legal expenses of anyindemnified party in connection with any proceeding or related proceedings inthe same jurisdiction, be liable for the fees and expenses of more than oneseparate firm (in addition to any local counsel) for all such indemnifiedparties and that all such fees and expenses shall be reimbursed as they areincurred.  Such firm shall be designated in writing by, in the case of partiesindemnified pursuant to **Section 7(a)** hereof, the Holders of a majority (withHolders of Units deemed to be the Holders, for purposes of determining suchmajority, of the number of shares of Underlying Common Stock that such Holdersare obligated to purchase pursuant to the Purchase Contracts that are acomponent of such Units) as of the date on which such designation is made) ofthe Registrable Securities covered by the Registration Statement held byHolders that are indemnified parties pursuant to **Section 7(a)** hereofand, in the case of parties indemnified pursuant to **Section 7(b)** hereof,the Company.  The indemnifying party shall not be liable for any settlement ofany proceeding effected without its written consent, but if settled with suchconsent or if there be a final judgment for the plaintiff, the indemnifyingparty agrees to indemnify the indemnified party from and against any loss orliability by reason of such settlement or judgment.  

Notwithstanding the foregoing sentence, if at any time anindemnified party shall have requested an indemnifying party to reimburse theindemnified party for fees and expenses of counsel as contemplated by thesecond and third sentences of the first paragraph of this subsection, theindemnifying party agrees that it shall be liable for any settlement of anyproceeding effected without its written consent if (i) such settlement isentered into more than 30 days after receipt by such indemnifying party of theaforesaid request and (ii) such indemnifying party shall not have reimbursedthe indemnified party in accordance with such request prior to the date of suchsettlement.  No indemnifying party shall, without the prior written consent ofthe indemnified party, effect any settlement of any pending or threatenedproceeding in respect of which any indemnified party is or could have been aparty and indemnity could have been sought hereunder by such indemnified party,unless such settlement includes an unconditional release of

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such indemnifiedparty from all liability on claims that are the subject matter of suchproceeding and does not include a statement as to, or an admission of, fault,culpability or a failure to act by or on behalf of any indemnified party. 

(d)      Contribution.  To the extent that the indemnificationprovided for in **Section 7(a)** or **7(b)** hereof is unavailable to anindemnified party or insufficient in respect of any losses, claims, damages orliabilities referred to therein, then each indemnifying party under suchparagraph, in lieu of indemnifying such indemnified party thereunder, shallcontribute to the amount paid or payable by such indemnified party as a resultof such losses, claims, damages or liabilities (i) in such proportion as isappropriate to reflect the relative benefits received by the indemnifying partyor parties on the one hand and the indemnified party or parties on the otherhand or (ii) if the allocation provided by clause (i) above is not permitted byapplicable law, in such proportion as is appropriate to reflect not only therelative benefits referred to in clause (i) above but also the relative faultof the indemnifying party or parties on the one hand and of the indemnifiedparty or parties on the other hand in connection with the statements oromissions that resulted in such losses, claims, damages or liabilities, as wellas any other relevant equitable considerations.  The relative fault of theHolders on the one hand and the Company on the other hand shall be determinedby reference to, among other things, whether the untrue or alleged untruestatement of a material fact or the omission or alleged omission to state amaterial fact relates to information supplied by the Holders or by the Company,and the parties' relative intent, knowledge, access to information andopportunity to correct or prevent such statement or omission.  The Holders'respective obligations to contribute pursuant to this **Section 7** areseveral in proportion to the respective number of Registrable Securities theyhave sold pursuant to a Registration Statement, and not joint.  

The parties hereto agree that it would not be just andequitable if contribution pursuant to this **Section 7(d)** were determinedby pro rata allocation or by any other method of allocation that does not takeinto account the equitable considerations referred to in the immediatelypreceding paragraph.  The amount paid or payable by an indemnified party as aresult of the losses, claims, damages or liabilities referred to in theimmediately preceding paragraph shall be deemed to include, subject to thelimitations set forth above, any legal or other expenses reasonably incurred bysuch indemnified party in connection with investigating or defending any suchaction or claim.  Notwithstanding this **Section 7**, no indemnifying partythat is a selling Holder shall be required to contribute any amount in excessof the amount by which the total price at which the Registrable Securities soldby it and distributed to the public were offered to the public exceeds theamount of any damages that such indemnifying party has otherwise been requiredto pay by reason of such untrue or alleged untrue statement or omission oralleged omission.  No person guilty of fraudulent misrepresentation (within themeaning of Section 11(f) of the Securities Act) shall be entitled tocontribution from any person who was not guilty of such fraudulentmisrepresentation.  

(e)    The remedies provided for in this **Section 7**are not exclusive and shall not limit any rights or remedies which mayotherwise be available to an indemnified party at law or in equity, hereunder,under the Unit Purchase Agreement or otherwise.  

(f)    The indemnity and contribution provisionscontained in this **Section 7** shall remain operative and in full force andeffect regardless of (i) any termination of this Agreement, 

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(ii) anyinvestigation made by or on behalf of any Holder, any person controlling anyHolder or any Affiliate of any Holder or by or on behalf of the Company, itsofficers or directors or any person controlling the Company and (iii) the saleof any Registrable Securities by any Holder.  

SECTION 8.      Information Requirements. The Company covenants that, if at any time before the end of the EffectivenessPeriod the Company is not subject to the reporting requirements of the ExchangeAct, it will cooperate with any Holder and take such further commerciallyreasonable action as any Holder may reasonably request in writing (including,without limitation, making such reasonable representations as any such Holdermay reasonably request), all to the extent required from time to time to enablesuch Holder to sell Registrable Securities without registration under theSecurities Act within the limitation of the exemptions provided by Rule 144 andRule 144A under the Securities Act and customarily taken in connection withsales pursuant to such exemptions.  Upon the written request of any Holder, theCompany shall deliver to such Holder a written statement as to whether it hascomplied with such filing requirements, unless such a statement has beenincluded in the Company's most recent report filed pursuant to Section 13 orSection 15(d) of Exchange Act.  Notwithstanding the foregoing, nothing in this **Section8** shall be deemed to require the Company to register any of its securities(other than the Common Stock) under any section of the Exchange Act. 

SECTION 9.      Purchase Right in Certain Instances.  In the event that (i) (a) aShelf Registration Statement or Demand Registration Statement is in effect and(b) the Initial Holder or any of its Affiliates desires to sell Common Stockunder such Registration Statement, the Initial Holder shall give notice to theCompany of the number of shares of Common Stock it and its Affiliates desire tosell at such time pursuant to the Registration Statement or (ii) the InitialHolder or any of its Affiliates shall have given notice of their request toparticipate in the sale of Common Stock in a Piggyback Registration pursuant to**Section 3**, specifying the number of shares of their Common Stock to beincluded in such Piggyback Registration (such Common Stock, or the shares ofCommon Stock specified in clause (i)(b), as the case may be, the **"OfferedCommon Stock"**, and either such notice, the **"Triggering Notice"**), theCompany may at its option give notice (the **"Purchase Notice"**) to theInitial Holder and such Affiliates (such notice to be given within ten (10)days of the date the Triggering Notice was given) that the Company willpurchase (on a purchase date to be specified in the Purchase Notice, the **"PurchaseDate"**, to be within five (5) days of the date of the Purchase Notice) all,but not less than all, of the Offered Common Stock of the Initial Holder andsuch Affiliates at the Current Market Price Per Share (as defined below).  Onthe Purchase Date, the Initial Holder shall sell, and shall cause each of itsAffiliates to sell, all of the Offered Common Stock to the Company at theCurrent Market Price Per Share for each share of such Common Stock. Notwithstanding the foregoing, the Company's right to purchase Offered CommonStock pursuant to this **Section 9** shall not apply to, and neither theInitial Holder nor its Affiliates shall be obligated to provide a TriggeringNotice to the Company prior to, any sales of Common Stock by the Initial Holderor any of its Affiliates pursuant to a Shelf Registration Statement or a DemandRegistration Statement in an amount not to exceed two percent (2%) of theCompany's outstanding Common Stock in any calendar quarter.  As used in this **Section9**,  **"Current Market Price Per Share"** means the average of the dailyClosing Prices per share of Common Stock on the ten Trading Days ending on theTrading Day next preceding the date the Triggering Notice is given and **"ClosingPrices"** and **"Trading Days"** have the respective meanings specified inthe Purchase Contract Agreement.

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SECTION 10.   Miscellaneous. 

(a)      No Conflicting Agreements.  The Company is not, as of thedate hereof, a party to, nor shall it, on or after the date of this Agreement,enter into, any agreement with respect to its securities that conflicts withthe rights granted to the Holders in this Agreement.  The Company representsand warrants that the rights granted to the Holders hereunder do not in any wayconflict with the rights granted to the holders of the Company's securitiesunder any other agreements.  

(b)      Amendments and Waivers.  The provisions of this Agreement,including the provisions of this sentence, may not be amended, modified orsupplemented, and waivers or consents to departures from the provisions hereofmay not be given, unless the Company has obtained the written consent ofHolders of a majority of the then outstanding Underlying Common Stockconstituting Registrable Securities (with Holders of Units deemed to be theHolders, for purposes of this Section, of the number of shares of UnderlyingCommon Stock that such Holders are obligated to purchase pursuant to thePurchase Contracts that are a component of such Units as of the date on whichsuch consent is requested).  Notwithstanding the foregoing, a waiver or consentto depart from the provisions hereof with respect to a matter that relatesexclusively to the rights of Holders whose securities are being sold pursuantto a Registration Statement and that does not directly or indirectly affect therights of other Holders may be given by Holders of at least a majority of theRegistrable Securities being sold by such Holders pursuant to such RegistrationStatement; *provided* that the provisions of this sentence may not beamended, modified or supplemented except in accordance with the provisions ofthe immediately preceding sentence.  Notwithstanding the foregoing sentence,this Agreement may be amended by written agreement signed by the Company andthe Initial Holder, without the consent of the Holders of RegistrableSecurities, to cure any ambiguity or to correct or supplement any provisioncontained herein that may be defective or inconsistent with any other provisioncontained herein, or to make such other provisions in regard to matters or questionsarising under this Agreement that shall not adversely affect the interests ofthe Holders of Registrable Securities.  Each Holder of Registrable Securitiesoutstanding at the time of any such amendment, modification, supplement, waiveror consent or thereafter shall be bound by any such amendment, modification,supplement, waiver or consent effected pursuant to this **Section 10(b)**,whether or not any notice, writing or marking indicating such amendment,modification, supplement, waiver or consent appears on the RegistrableSecurities or is delivered to such Holder.  

(c)      Notices.  All notices and other communications provided foror permitted hereunder shall be made in writing by hand delivery, bytelecopier, by courier guaranteeing overnight delivery or by first-class mail,return receipt requested, and shall be deemed given (i) when made, if made byhand delivery, (ii) upon confirmation, if made by telecopier, (iii) one (1)Business Day after being deposited with such courier, if made by overnightcourier or (iv) on the date indicated on the notice of receipt, if made byfirst-class mail, to the parties as follows: 

                                                                 (i)                       if to a Holder, at the most current address given by such Holderto the Company in a Notice and Questionnaire or any amendment thereto;

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                                                               (ii)          if to the Company, to:

PNM Resources, Inc.Alvarado Square MS-2704Albuquerque, New Mexico  87158Facsimile No.:  505-241-4343Attention:  Treasurer

With a copy to:

Bracewell & Giuliani LLP1177 Avenue of the Americas

19th Floor

New York, New York 10036-2714Facsimile No:  212-508-6101Attention:    Timothy Michael Toy

                                                              (iii)          if to the Initial Holder, to:

Cascade Investment, L.L.C.2365 Carillon PointKirkland, Washington 98033Attention:  Robert Thomas and General Counsel

or to such other address as such person may have furnishedto the other persons identified in this **Section 10(c)** in writing inaccordance herewith.

(d)      Approval of Holders.  Whenever the consent or approval ofHolders of a specified percentage of Registrable Securities is requiredhereunder, Registrable Securities held by the Company or its affiliates (assuch term is defined in Rule 405 under the Securities Act) (other than the InitialHolder or subsequent Holders if such Initial Holder or subsequent Holders aredeemed to be such affiliates solely by reason of their holdings of suchRegistrable Securities) shall not be counted in determining whether suchconsent or approval was given by the Holders of such required percentage. 

(e)      Successors and Assigns.  Any person who purchases anyRegistrable Securities from the Initial Holder shall be deemed, for purposes ofthis Agreement, to be an assignee of the Initial Holder.  This Agreement shallinure to the benefit of and be binding upon the successors and assigns of eachof the parties and shall inure to the benefit of and be binding upon eachHolder of any Registrable Securities, *provided* that nothing herein shallbe deemed to permit any assignment, transfer or other disposition ofRegistrable Securities in violation of the terms of the Purchase ContractAgreement, Indenture or the Company's certificate of incorporation and by-laws,as applicable.  If any transferee of any Holder shall acquire RegistrableSecurities, in any manner, whether by operation of law or otherwise, suchRegistrable Securities shall be held subject to all of the terms of thisAgreement, and by taking and holding such Registrable Securities, such personshall be conclusively deemed to have agreed to be bound by and to perform allof the terms and provisions of this Agreement and such person shall be entitledto receive the benefits hereof.  

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(f)        Counterparts; Facsimile Execution.  This Agreement may beexecuted in any number of counterparts and by the parties hereto in separatecounterparts, each of which when so executed shall be deemed to be original andall of which taken together shall constitute one and the same agreement.  Facsimileexecution and delivery of this Agreement is legal, valid and binding for allpurposes.

(g)      Headings.  The headings in this Agreement are for convenienceof reference only and shall not limit or otherwise affect the meaning hereof.

(h)      Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY ANDCONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TOCONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TOPRINCIPLES OF CONFLICTS OF LAW.  EACH OF THE PARTIES HERETO AGREES TO SUBMIT TOTHE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION ORPROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.  

(i)        Severability.  If any term, provision, covenant orrestriction of this Agreement is held to be invalid, illegal, void orunenforceable, the remainder of the terms, provisions, covenants andrestrictions set forth herein shall remain in full force and effect and shallin no way be affected, impaired or invalidated thereby, and the parties heretoshall use their reasonable best efforts to find and employ an alternative meansto achieve the same or substantially the same result as that contemplated bysuch term, provision, covenant or restriction, it being intended that all ofthe rights and privileges of the parties shall be enforceable to the fullestextent permitted by law.  

(j)        Entire Agreement.  This Agreement is intended by the partiesas a final expression of their agreement and is intended to be a complete andexclusive statement of the agreement and understanding of the parties hereto inrespect of the registration rights granted by the Company with respect to theRegistrable Securities.  This Agreement supersedes all prior agreements andundertakings among the parties with respect to such registration rights.  Noparty hereto shall have any rights, duties or obligations with respect toregistration rights for the Registrable Securities other than thosespecifically set forth in this Agreement.  

(k)      Termination.  This Agreement and the obligations of theparties hereunder shall terminate upon the end of the Effectiveness Period,except for any liabilities or obligations under **Section 5**, **6** or **7**hereof, each of which shall remain in effect in accordance with its terms.

[Remainder of pageintentionally left blank; Signature page follows]

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[Signature page toRegistration Rights Agreement]

IN WITNESS WHEREOF, theparties have executed this Registration Rights Agreement as of the date firstwritten above.

PNMRESOURCES, INC.

By: /s/Terry R. Horn      TerryR. Horn      VicePresident, Corporate Secretary, and      ActingChief Financial Officer

Confirmed and accepted as of thedate first above written:

By:  CASCADE INVESTMENT,L.L.C.

By: /s/ Michael Larson      Michael Larson      Business Manager

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**Exhibit A**

**PNM Resources, Inc.**

Notice of RegistrationStatementandSelling Securityholder Questionnaire

(Date)

Referenceis hereby made to the Registration Rights Agreement (the "**RegistrationRights Agreement**") between PNM Resources, Inc. (the "**Company**") and CascadeInvestment, L.L.C.  Pursuant to the Registration Rights Agreement, the Companyhas filed with the Securities and Exchange Commission (the "**Commission**")a registration statement on Form S-3 (the "**Shelf Registration Statement**")for the registration and resale under Rule 415 of the Securities Act of1933 (the "**Securities Act**"), of the Company's Common Stock, PreferredStock and Units (the "**Securities**").  A copy of the Registration RightsAgreement is attached hereto.  All capitalized terms not otherwise definedherein shall have the meanings ascribed thereto in the Registration RightsAgreement.

Eachbeneficial owner of Registrable Securities is entitled to have the RegistrableSecurities beneficially owned by it included in the Shelf RegistrationStatement.  In order to have Registrable Securities included in the ShelfRegistration Statement, this Notice of Registration Statement and SellingSecurityholder Questionnaire ("**Notice and Questionnaire**") must becompleted, executed and delivered to the Company's counsel at the address setforth herein for receipt ON OR BEFORE **[Deadline for Response]**.  Beneficialowners of Registrable Securities who do not complete, execute and return thisNotice and Questionnaire by such date (i) will not be named as sellingsecurityholders in the Shelf Registration Statement and (ii) may not usethe Prospectus forming a part thereof for resales of Registrable Securities.

Certainlegal consequences arise from being named as a selling securityholder in theShelf Registration Statement and related Prospectus.  Accordingly, holders andbeneficial owners of Registrable Securities are advised to consult their ownsecurities law counsel regarding the consequences of being named or not beingnamed as a selling securityholder in the Shelf Registration Statement andrelated Prospectus.

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ELECTION

Theundersigned holder (the "**Selling Securityholder**") of RegistrableSecurities hereby elects to include in the Shelf Registration Statement theRegistrable Securities beneficially owned by it and listed below inItem (3).  The undersigned, by signing and returning this Notice andQuestionnaire, agrees to be bound with respect to such Registrable Securitiesby the terms and conditions of this Notice and Questionnaire and the RegistrationRights Agreement, including, without limitation, **Section 7** of the RegistrationRights Agreement, as if the undersigned Selling Securityholder were an originalparty thereto.

Uponany sale of Registrable Securities pursuant to the Shelf RegistrationStatement, the Selling Securityholder will be required to deliver to theCompany and transfer agent for the Company's Common Stock the Notice ofTransfer set forth as **Exhibit B** to the Registration Rights Agreement. 

TheSelling Securityholder hereby provides the following information to the Companyexpressly for use in the Shelf Registration Statement and represents andwarrants that such information is accurate and complete:

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QUESTIONNAIRE

(1)  (a)     Full Legal Name of SellingSecurityholder:

                                                                                                                                                          

      (b)     Full Legal Name of RegisteredHolder (if not the same as in (a) above) of Registrable Securities Listed inItem (3) below:

     

      (c)     Full Legal Name of DTC Participant(if applicable and if not the same as (b) above)  Through Which RegistrableSecurities Listed in Item (3) are Held:

(2)           Address for Notices to SellingSecurityholder:

                                                                                                                                               

                                                                                                                                               

                                                                                                                                               

               Telephone:                                                               

               Fax:                                                                         

               Contact Person:                                                       

(3)           Beneficial Ownership ofSecurities:

*               Except as set forth below in thisItem (3), the undersigned does not beneficially own any Securities.*

      (a)     Principalamount of Registrable Securities beneficially owned:                                                

               CUSIPNo(s). of such Registrable Securities:                                                                        

      (b)     Principalamount of Securities other than Registrable Securities beneficially owned:                                                                                                                                             CUSIP No(s).  of such other Securities:                                                                                

      (c)     Principalamount of Registrable Securities which the undersigned wishes to be included inthe Shelf Registration Statement:                                                                                                                            

               CUSIPNo(s). of such Registrable Securities to be included in the Shelf RegistrationStatement:          

(4)           BeneficialOwnership of Other Securities of the Company: 

*               Except as set forth below in thisItem (4), the undersigned Selling Securityholder is not the beneficial orregistered owner of any other securities of the Company, other than theSecurities listed above in Item (3).*

               State any exceptions here:

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(5)           Relationships with the Company:

*               Except as set forth below,neither the Selling Securityholder nor any of its affiliates, officers, directorsor principal equity holders (5% or more) has held any position or office or hashad any other material relationship with the Company (or its predecessors oraffiliates) during the past three years.*

               State any exceptions here:

(6)           Plan of Distribution:

*               Except as set forth below, theundersigned Selling Securityholder intends to distribute the RegistrableSecurities listed above in Item (3) only as follows (if at all):  SuchRegistrable Securities may be sold from time to time directly by the undersignedSelling Securityholder or, alternatively, through underwriters, broker-dealersor agents.  Such Registrable Securities may be sold in one or more transactionsat fixed prices, at prevailing market prices at the time of sale, at varyingprices determined at the time of sale, or at negotiated prices.  Such sales maybe effected in transactions (which may involve crosses or block transactions)(i) on any national securities exchange or quotation service on which theRegistered Securities may be listed or quoted at the time of sale, (ii) in theover-the-counter market, (iii) in transactions otherwise than on such exchangesor services or in the over-the-counter market or (iv) through the writing ofoptions.  In connection with sales of the Registrable Securities or otherwise,the Selling Securityholder may enter into hedging transactions withbroker-dealers, which may in turn engage in short sales of the RegistrableSecurities in the course of hedging the positions they assume.  The SellingSecurityholder may also sell Registrable Securities short and deliverRegistrable Securities to close out such short positions, or loan or pledgeRegistrable Securities to broker-dealers that in turn may sell such securities.*

               State anyexceptions here:

By signing below, the Selling Securityholderacknowledges that it understands its obligation to comply, and agrees that itwill comply, with the provisions of the Exchange Act and the rules andregulations thereunder, particularly Regulation M.

In the event that the Selling Securityholdertransfers all or any portion of the Registrable Securities listed inItem (3) above after the date on which such information is provided to theCompany, the Selling Securityholder agrees to notify the transferee(s) at thetime of the transfer of its rights and obligations under this Notice andQuestionnaire and the Registration Rights Agreement.

By signing below, the Selling Securityholderconsents to the disclosure of the information contained herein in its answersto Items (1) through (6) above and the inclusion of such 

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information inthe Shelf Registration Statement and related Prospectus.  The Selling Securityholder understands that such information will be relied upon by theCompany in connection with the preparation of the Shelf Registration Statementand related Prospectus.

In accordance with the Selling Securityholder'sobligation under **Section 5** of the Registration Rights Agreement toprovide such information as may be required by law for inclusion in the ShelfRegistration Statement, the Selling Securityholder agrees to promptly notifythe Company of any inaccuracies or changes in the information provided hereinwhich may occur subsequent to the date hereof at any time while the ShelfRegistration Statement remains in effect.  All notices hereunder and pursuantto the Registration Rights Agreement shall be made in writing, byhand-delivery, first-class mail, or air courier guaranteeing overnight deliveryas follows:

(i)         To the Company:

PNM Resources, Inc.Alvarado Square SM-2704Albuquerque, New Mexico  87158Facsimile No.:  505-241-4343Attention:  Treasurer

(ii)     With a copy to:

Bracewell & Giuliani LLP1177 Avenue of the Americas

19th Floor

New York, New York 10036-2714Facsimile No:  212-508-6101Attention:    Timothy Michael Toy

Oncethis Notice and Questionnaire is executed by the Selling Securityholder andreceived by the Company's counsel, the terms of this Notice and Questionnaire,and the representations and warranties contained herein, shall be binding on,shall inure to the benefit of and shall be enforceable by the respectivesuccessors, heirs, personal representatives, and assigns of the Company and theSelling Securityholder (with respect to the Registrable Securities beneficiallyowned by such Selling Securityholder and listed in Item (3) above).  ThisAgreement shall be governed in all respects by the laws of the State of NewYork without giving effect to the conflicts of laws principles thereof.

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IN WITNESS WHEREOF, the undersigned, byauthority duly given, has caused this Notice and Questionnaire to be executedand delivered either in person or by its duly authorized agent.

Dated:                                    

                                                                                                                                                          

                        Selling Securityholder                        (Print/type fulllegal name of beneficial owner of Registrable Securities)

                        By:                                                                                                                                                     Name:                        Title:

PLEASE RETURN THE COMPLETED AND EXECUTED NOTICEAND QUESTIONNAIRE FOR RECEIPT ON OR BEFORE **[DEADLINE FOR RESPONSE]** TOTHE COMPANY'S COUNSEL AT:

Bracewell & Giuliani LLP1177 Avenue of the Americas19th FloorNew York, New York 10036-2714Facsimile No:  212-508-6101Attention:    Timothy Michael Toy

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**Exhibit B**

NOTICE OF TRANSFERPURSUANT TO REGISTRATION STATEMENT

[Transfer Agent's Name]PNM Resources, Inc.

c/o[Transfer Agent's Name][Transfer Agent'sAddress]

Attention: Trust Officer

Re:       PNM Resources,Inc. (the "Company")[Hybrid Income Term Security Units][Common Stock]

Ladiesand Gentlemen:

Pleasebe advised that __________ has transferred $__________ aggregate amount of theabove-referenced [Hybrid Income Term Security Units] [Common Stock] pursuant toan effective Registration Statement on Form S-[  ] (File No.  333-         )filed by the Company.

Wehereby certify that the prospectus delivery requirements, if any, of theSecurities Act of 1933, as amended, have been satisfied and that theabove-named beneficial owner of the [Hybrid Income Term Security Units] [CommonStock] is named as a "Selling Holder" in the Prospectus dated **[date]** orin supplements thereto, and that the aggregate amount of the [Hybrid IncomeTerm Security Units] [Common Stock] transferred are the [Hybrid Income TermSecurity Units] [Common Stock] listed in such Prospectus opposite such owner'sname.

Dated:

Very truly yours,

                                                          

            (Name)

By:                                                      

                                                (AuthorizedSignature)

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**ExhibitC**

**LOCKUP LETTER**

[Letterhead of PNMResources, Inc.]

_________, 200_

           ***Re: Lock Up Agreement***

Ladies and Gentlemen:

            Reference is made to that certain RegistrationRights Agreement, dated October 7, 2005 (the "**Registration Rights Agreement**"),between PNM Resources, Inc. (the "**Company**") and Cascade Investment, L.L.C.(the "**Initial Holder**").  Capitalized terms that are used, but nototherwise defined, herein have the meanings ascribed to those terms in theRegistration Rights Agreement or as specified herein, as the case may be.

            The Company has proposed to undertake a CompanyRegistration and you have elected not to include your Registrable Common Stockin the related Piggyback Registration requested by other Holders.  Pursuant to **Section3(b)(iv)** of the Registration Rights Agreement, you are required to enter intothis letter agreement (this "**Agreement**") which will impose transferlimitations on any shares of Common Stock, or any securities convertible intoor exchangeable into or exercisable for any shares of Common Stock held by you,which are not included in the Piggyback Registration (collectively, the "**Securities**")during the Lock Up Period.

            Accordingly, you and the Company agree asfollows:

1.        **Lock Up**

***           ***(a)***        Lock-up; Lock-upPeriod****.*  Except for Transfers permitted by **Section 2**hereof (each a "**Permitted Transfer**"), you  agree that you will not,directly or indirectly, sell, offer to sell, assign, pledge, hypothecate,encumber or otherwise transfer, or enter into any contract, option or otherarrangement or understanding with respect to the sale, assignment, pledge orother disposition of (collectively, "**Transfer**") any rightswith respect to the Securities for a period commencing on the date that theCompany Registration commences and ending on the ninetieth (90th)day following the commencement of the Company Registration (such ninety dayperiod being referred to herein as the "**Lock Up Period**"). Notwithstanding the foregoing, the Lock Up Period shall automatically terminateif (i) neither the Company (with respect to Securities other than thoseincluded in the Company Registration) nor any director, officer or affiliate ofthe Company holding more than 50,000 shares of Common Stock is subject tosubstantially similar Transfer restrictions on securities of the Company heldby such persons at any time during the Lock Up Period, or (ii) any other Holderholding more than 50,000 shares of Common Stock that is not participating inthe Piggyback Registration (a "**Non-Participating Holder**") does notexecute a lock-up agreement substantially similar to this Agreement or if anyNon-Participating Holder is released from its obligations under its lock-upagreement.

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            (b)        ***No Hedging or SimilarTransactions***.  The Transfer restriction contained in **Section 1(a)**precludes you from engaging in any hedging or other transaction during theLock-up Period that is designed to or reasonably expected to lead to or resultin a Transfer of the Securities.  Such prohibited hedging or other transactionwould include, without limitation, any short sale (whether or not against thebox) or any purchase, sale, or grant of any right (including, withoutlimitation, any put or call option) with respect to the Securities or withrespect to any security (other than a broad-based market basket or index) thatincludes, relates to or derives any significant part of its value from theCommon Stock.

            (c)        ***Stop Transfer Order****. *You also agree and consent to the entry of stop transfer instructions withthe Company's transfer agent and registrar against the Transfer of theSecurities except in compliance with the terms and conditions of thisAgreement. 

            (d)        ***Invalid Transfers***.  Anypurported Transfer of Securities that is not in accordance with this Agreementshall be null and void, and shall not operate to Transfer any right, title orinterest in such Securities to the purported transferee.

2.         **Permitted and Involuntary Transfers**.

            (a)        ***Permitted Transfers****. *Notwithstanding the provisions of **Section 1** hereof, you may Transferthe Securities to any Affiliate (as such term is defined in Rule 144promulgated under the Securities Act of 1933) or to any other person as long asany such Transfer to such other person is effected in a private transaction andnot over the exchange, quotation system or other market where securities of theCompany are then traded or quoted; provided, however, that **in each case**the transferee first agrees in writing to be bound by the provisions of thisAgreement applicable to you.  

            (b)        ***Involuntary Transfers****. *If any Securities are subject to any involuntary Transfer during the LockUp Period, such involuntary Transfer shall constitute a Permitted Transfer andthe transferee of such Securities shall take such Securities subject to thisAgreement. 

3.         **Representations and Warranties of theCompany**.  The Company hereby represents and warrants to you that theCompany (with respect to Securities other than those included in the CompanyRegistration) every Non-Participating Holder, and every director, officer andAffiliate of the Company, in each case holding more than 50,000 shares ofCommon Stock is subject to a "lock-up" agreement with respect to the CompanyRegistration that is substantially similar to this Agreement.

4.         **Miscellaneous**.

            (a)        ***Termination****.* This Agreement shall automatically terminate upon the expiration of the Lock-upPeriod.

            (b)        ***Governing Law****.* The internal law, without regard for conflicts of law principles, of the Stateof New York will govern all questions concerning the construction, validity and

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interpretation of this Agreement and the performance of the obligations imposedby this Agreement.

            (c)        ***Counterparts; FacsimileExecution****.*  This Agreement may be executed in one or morecounterparts, any one of which need not contain the signatures of more than oneparty, but all such counterparts taken together shall constitute one and thesame instrument.  Facsimile execution and delivery of this Agreement is legalvalid and binding for all purposes.

            Please acknowledge your agreement to theforegoing by executing this Agreement in the space provided below.

                                                            Sincerely,

                                                            PNMRESOURCES, INC.

                                                            By:__________________________________                                                                  Name:                                                                  Title:

ACCEPTEDAND AGREED TOAS OF THEDATE FIRST ABOVEWRITTEN:

**HOLDER:**

***For Individuals:***

_________________________________

PrintName Above

_________________________________

SignName Above

***For Entities:***

__________________________________

PrintName of Entity Above

By:       _______________________________

            Name:

            Title:

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