Shareholder Agreement - New Mexico

SHAREHOLDER AGREEMENT — [CORPORATION NAME], a New Mexico corporation

TABLE OF CONTENTS

1. Definitions
2. Purpose & Statutory Authorization
3. Transfer Restrictions
4. Buy-Sell (Triggering Events; Mandatory and Optional Purchase)
5. Valuation & Payment Terms
6. Voting Agreement; Board; Officers
7. Drag-Along & Tag-Along Rights
8. Preemptive Rights
9. Protective Provisions / Supermajority
10. Information Rights
11. Restrictive Covenants
12. Deadlock Resolution
13. Certificate Legend
14. Term & Termination
15. Dispute Resolution & Governing Law
16. General Provisions
17. Signatures
18. Sources & References

RECITALS AND PARTIES

THIS SHAREHOLDER AGREEMENT (this "Agreement") is made and entered into as of [__/__/____] (the "Effective Date") by and among [CORPORATION NAME], a New Mexico corporation (the "Corporation"), and the persons listed on the Share Schedule below and who execute this Agreement (each, a "Shareholder" and, collectively, the "Shareholders").

RECITALS

A. The Corporation is a corporation organized and existing under the New Mexico Business Corporation Act, NMSA 1978, § 53-11-1 et seq. (the "Act"), having its registered office in [COUNTY] County, New Mexico.

B. As of the Effective Date, the authorized capital of the Corporation consists of [____] shares of [CLASS/SERIES] stock, par value [$____] per share, of which [____] shares are issued and outstanding and held of record by the Shareholders as set forth in the Share Schedule.

C. The Corporation is a closely-held corporation whose shares are not publicly traded. The Shareholders desire to provide for the management, ownership, and continuity of the Corporation; to restrict the transfer of its shares; to provide an orderly mechanism for the purchase and sale of shares upon certain events; to coordinate the voting of their shares and the composition of the Board; and to otherwise set forth their respective rights and obligations.

D. The Shareholders intend the voting covenants to operate under NMSA 1978, § 53-11-34(B), and intend the Corporation to give the notice required by NMSA 1978, § 55-8-204 for any otherwise-lawful issuer restriction adopted under this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows.

Share Schedule (Ownership as of the Effective Date)

1. DEFINITIONS

For purposes of this Agreement, the following terms have the meanings set forth below. Other terms are defined where they first appear.

"Act" means the New Mexico Business Corporation Act, NMSA 1978, § 53-11-1 et seq., as amended.

"Affiliate" means, as to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person.

"Agreed Value" has the meaning set forth in Section 5.1.

"Board" means the board of directors of the Corporation.

"Business Day" means any day other than a Saturday, Sunday, or legal holiday in the State of New Mexico.

"Disability" means a Shareholder's inability, by reason of physical or mental illness or injury, to perform substantially all of the duties such Shareholder customarily performs for the Corporation for a continuous period of [____] days or for [____] days in any [twelve (12)]-month period, as determined in accordance with Section 4.2(c).

"Fair Market Value" has the meaning set forth in Section 5.2.

"Immediate Family" means a Shareholder's spouse, children (natural or adopted), grandchildren, parents, and siblings, and a trust established solely for the benefit of any of them or the Shareholder.

"Permitted Transferee" has the meaning set forth in Section 3.3.

"Person" means an individual, corporation, partnership, limited liability company, trust, estate, association, or other entity.

"Purchase Price" means the price determined under Section 5 for shares purchased under this Agreement.

"Shares" means all shares of capital stock of the Corporation now owned or hereafter acquired by a Shareholder, and any securities convertible into or exercisable for such shares.

"Transfer" means any sale, assignment, gift, pledge, hypothecation, encumbrance, or other disposition of Shares or any interest therein, whether voluntary or involuntary, by operation of law or otherwise.

"Triggering Event" has the meaning set forth in Section 4.1.

2. PURPOSE & STATUTORY AUTHORIZATION

2.1 Purpose

The purpose of this Agreement is to promote the Shareholders' mutual interests and the interests of the Corporation by imposing certain restrictions and obligations on the Shareholders and the Shares, and by providing for the continuity, governance, and orderly transfer of ownership of a closely-held New Mexico corporation.

2.2 Statutory Basis

This Agreement is entered into under and is intended to be enforceable pursuant to New Mexico law, including:

(a) Voting agreements and voting trusts. NMSA 1978, § 53-11-34 provides, in Subsection A, that any number of shareholders may create a voting trust for a period not to exceed ten years by entering into a written agreement, depositing a counterpart with the corporation at its registered office, and transferring their shares to the trustee(s); and, in Subsection B, that "[a]greements among shareholders regarding the voting of their shares, which agreements are not voting trusts or purported voting trusts, . . . shall be valid and specifically enforceable." The voting provisions of Section 6 constitute a voting agreement under § 53-11-34(B).

(b) Transfer restrictions and notice. Section 55-8-204 provides that a transfer restriction imposed by the issuer, even if otherwise lawful, is ineffective against a person without knowledge unless the restriction is conspicuously noted on a certificated security or the registered owner of an uncertificated security has been notified. That section is a notice/effect rule, not substantive authorization for the restriction. The Corporation shall separately approve any issuer restriction through the corporate action required by the Act, the Articles, and the Bylaws, and shall give the § 55-8-204 notice. Contractual restrictions among signing Shareholders bind only as applicable law and the contract permit.

(c) Preemptive rights. Under NMSA 1978, § 53-11-26, shareholders have preemptive rights except to the extent limited by that section or the Articles. Section 8 separately states contractual rights among the parties; it does not amend the Articles or bind a later holder that has not joined this Agreement.

2.3 Coordination with Charter Documents

Under NMSA 1978, § 53-11-35, corporate powers and management remain with or under the authority of the Board except as the Act or the Articles otherwise provide. Any intended reallocation of Board powers must be placed in the Articles to the extent permitted by law. The parties shall also coordinate the Bylaws, obtain the approvals required for each action, and avoid treating this Agreement as self-executing corporate action. If this Agreement conflicts with the Articles, the Act, or another mandatory rule, the governing law or Articles control; the parties shall pursue a lawful conforming amendment rather than direct an unlawful act.

3. TRANSFER RESTRICTIONS

3.1 General Prohibition

No Shareholder shall Transfer all or any portion of such Shareholder's Shares except in compliance with this Agreement and applicable law. A violating Shareholder is subject to the contractual remedies available under this Agreement. The Corporation may decline to register a transfer only when applicable law and an effective issuer restriction permit it; this clause does not by itself make every noncompliant transfer void or defeat the rights of a protected transferee, bankruptcy estate, trustee, receiver, or creditor.

3.2 Right of First Refusal

(a) Offer Notice. A Shareholder who receives a bona fide written offer from a third party to purchase any of such Shareholder's Shares and who desires to accept it (the "Selling Shareholder") shall first deliver written notice (the "Offer Notice") to the Corporation and the other Shareholders. The Offer Notice shall identify the prospective transferee, the number of Shares offered (the "Offered Shares"), the price, and all material terms.

(b) Corporation's Option. Subject to the corporate-law condition in Section 4.2(a), the Corporation shall have [thirty (30)] days after receipt of the Offer Notice to elect, by written notice, to purchase all or any portion of the Offered Shares on the same terms set forth in the Offer Notice.

(c) Shareholders' Option. To the extent the Corporation does not elect to purchase all of the Offered Shares, the other Shareholders shall have an additional [thirty (30)] days to elect to purchase the remaining Offered Shares, pro rata in proportion to their respective holdings (with rights of over-allotment among electing Shareholders).

(d) Sale to Third Party. If the Corporation and the Shareholders do not collectively elect to purchase all of the Offered Shares within the option periods, the Selling Shareholder may, within [sixty (60)] days thereafter, Transfer the Offered Shares to the identified third party at a price not less than, and on terms no more favorable to the transferee than, those in the Offer Notice, provided the transferee first executes a joinder agreeing to be bound by this Agreement. Any Shares not so transferred again become subject to this Agreement.

3.3 Permitted Transfers

The right of first refusal in Section 3.2 shall not apply to, and a Shareholder may make, the following Transfers (each, a "Permitted Transfer"; each transferee, a "Permitted Transferee"), provided the transferee executes a joinder agreeing to be bound by this Agreement and the Shares remain subject hereto:

(a) a Transfer to the Corporation or to another Shareholder;

(b) a Transfer to a member of the Shareholder's Immediate Family or to a trust or entity wholly owned for estate-planning purposes, provided the transferring Shareholder retains voting control of the Shares during such Shareholder's lifetime;

(c) a Transfer upon death by will or intestacy, subject to Section 4; and

(d) any Transfer approved in writing by Shareholders holding at least [____]% of the outstanding Shares.

3.4 Prohibited Transfers

No Shareholder shall pledge, hypothecate, or grant a security interest in any Shares, or Transfer any Shares to a competitor of the Corporation, without the prior written consent of Shareholders holding at least [____]% of the outstanding Shares.

4. BUY-SELL: TRIGGERING EVENTS

4.1 Triggering Events

The occurrence of any of the following with respect to a Shareholder (a "Triggering Event"; such Shareholder, the "Affected Shareholder" or such Shareholder's estate or representative) gives rise to the purchase rights and obligations in this Section 4:

(a) Death of a Shareholder who is an individual;

(b) Disability of a Shareholder who is an individual;

(c) Termination of Employment of a Shareholder who is employed by the Corporation, whether voluntary or involuntary, with or without cause;

(d) Bankruptcy or Insolvency of a Shareholder, including the filing of a voluntary or involuntary petition, an assignment for the benefit of creditors, or the appointment of a receiver;

(e) Divorce of a Shareholder, to the extent any Shares (or community or marital interest therein) would be awarded to a non-Shareholder spouse;

(f) Involuntary Transfer by operation of law, levy, or attachment; and

(g) Voluntary Withdrawal by a Shareholder who delivers a written notice of intent to withdraw and sell.

4.2 Mandatory and Optional Purchase

(a) Corporate-law condition. Every purchase by the Corporation under this Agreement requires valid Board authorization and is limited by NMSA 1978, § 53-11-44. The Corporation shall not transfer money or property, incur purchase-price debt, or cause the seller to cease being a shareholder if the resulting distribution would violate § 53-11-44(A). If the Corporation cannot lawfully complete a stated mandatory purchase, apply the selected Shareholder backstop, deferral, or other counsel-approved alternative: [describe: ____________________].

(b) Death. Upon the death of a Shareholder, the Corporation [shall (mandatory) / may (optional)] purchase, and the deceased Shareholder's estate shall sell, all of the deceased Shareholder's Shares at the Purchase Price determined under Section 5, subject to Section 4.2(a). To the extent the Corporation does not purchase all such Shares, the surviving Shareholders [shall / may] purchase the balance pro rata.

(c) Disability. Disability shall be determined by a licensed physician selected by the Corporation (or, if the Affected Shareholder disputes the determination, by a third physician jointly selected by the Corporation's and the Shareholder's physicians). Upon a determination of Disability, the purchase mechanics in Section 4.2(b) apply.

(d) Termination of Employment. Upon Termination of Employment of a Shareholder, the Corporation and the other Shareholders shall have the option (and, if the parties so elect by completing the bracketed term, the obligation) to purchase the terminated Shareholder's Shares. The parties shall complete: purchase is [mandatory / optional]; in the case of termination [for cause], the Purchase Price shall be [Fair Market Value / __% of Fair Market Value / Agreed Value]. Any Corporation purchase remains subject to Section 4.2(a).

(e) Bankruptcy, Divorce, Involuntary Transfer, Voluntary Withdrawal. Upon any such Triggering Event, the Corporation (first) and the other Shareholders (second) shall have the option to purchase all of the Affected Shareholder's Shares (or the Shares subject to the involuntary transfer or divorce award) at the Purchase Price determined under Section 5. A Corporation purchase remains subject to Section 4.2(a). A non-Shareholder spouse or transferee is bound only to the extent applicable law and an enforceable joinder or restriction so provide. Under 11 U.S.C. § 541(c)(1), nothing in this Agreement excludes the ownership interest from a bankruptcy estate, binds a bankruptcy trustee beyond applicable law, or limits a trustee's statutory powers.

4.3 Closing

The closing of any purchase under this Section shall occur within [sixty (60)] days after the later of the Triggering Event or the final determination of the Purchase Price, at the Corporation's principal office. At closing, the seller shall deliver the certificates (or transfer instructions for uncertificated shares) duly endorsed, free of liens, and the buyer shall deliver the consideration in accordance with Section 5.3.

5. VALUATION & PAYMENT TERMS

5.1 Agreed Value

The Shareholders [may] establish an agreed value per Share (the "Agreed Value") by executing a Certificate of Agreed Value attached as Exhibit A, to be reviewed and updated at least annually. If a Certificate of Agreed Value has been executed within [twenty-four (24)] months before a Triggering Event, the Agreed Value shall be the Purchase Price.

5.2 Formula / Appraisal (Fair Market Value)

If no current Agreed Value exists, the Purchase Price shall be the "Fair Market Value" of the Shares, determined as follows (the parties shall select one method):

(a) Formula. [Describe formula — e.g., [____] times trailing twelve-month EBITDA, less indebtedness, multiplied by the selling percentage]; or

(b) Appraisal. Fair Market Value shall be determined by an independent appraiser. The Corporation and the seller shall each select one qualified appraiser within [fifteen (15)] days; if the two appraisals are within [ten percent (10%)] of each other, the Fair Market Value is their average; otherwise, the two appraisers shall select a third, whose determination (within the range of the first two) is binding. The appraisal shall [apply / not apply] minority and marketability discounts.

5.3 Payment Terms

(a) Cash / Insurance Proceeds. At closing, the buyer shall pay [____]% of the Purchase Price in cash, including any life-insurance proceeds applied under Section 5.4.

(b) Promissory Note. The balance shall be evidenced by a promissory note payable in [____] equal [monthly / quarterly / annual] installments over [____] years, bearing interest at [the applicable federal rate / ____% per annum], with the right to prepay without penalty. If another Shareholder is the buyer, the note may be secured by a pledge of the purchased Shares. If the Corporation is the buyer, select different lawful security, if any: [____________________]; incurring the note is part of the distribution tested under NMSA 1978, § 53-11-44(C), and the note's creditor priority is governed by Subsection D unless subordinated by agreement.

5.4 Life-Insurance Funding

(a) The Corporation [and/or the Shareholders] may purchase and maintain life-insurance policies on the lives of the Shareholders to fund the purchase obligations on death. The Corporation shall be the [owner and beneficiary] of such policies.

(b) The policies and beneficiaries are listed on Exhibit B. Upon a Shareholder's death, the proceeds shall be applied first to the Purchase Price for that Shareholder's Shares. Proceeds exceeding the Purchase Price shall belong to the Corporation.

(c) For a Triggering Event involving a living insured, the insured Shareholder may purchase a policy on that Shareholder's life only if the policy remains in force, the insurer permits assignment, and the parties complete the valuation and transfer requirements: [____________________]. This option does not apply after the insured's death.

6. VOTING AGREEMENT; BOARD; OFFICERS

6.1 Voting Agreement

Each Shareholder agrees to vote all Shares now or hereafter owned by such Shareholder, and to take lawful action within such Shareholder's control, to give effect to this Section 6. This Section is a voting agreement under NMSA 1978, § 53-11-34(B). It is not a voting trust and therefore is not subject to § 53-11-34(A)'s ten-year limit and voting-trust deposit requirements. Action without a shareholder meeting may be used only when the consent satisfies NMSA 1978, § 53-18-8, including signature by all shareholders entitled to vote on the subject.

6.2 Board Composition

(a) The parties shall vote to fix the Board at [____] directors through the Articles or Bylaws as required by NMSA 1978, § 53-11-36.

(b) Each Shareholder (or group of Shareholders) holding at least [____]% of the outstanding Shares may designate [one (1)] nominee, and the Shareholders shall vote their Shares for each eligible designee at the election. A designating Shareholder may request removal and replacement of its designee, but removal must occur at a meeting called for that purpose and satisfy NMSA 1978, § 53-11-39, including any cumulative-voting, class-election, or classified-board limitation.

(c) If a designated seat becomes vacant, the designating Shareholder may nominate a replacement. The remaining directors shall vote for that nominee to the extent consistent with their duties and NMSA 1978, § 53-11-38; if the Articles validly provide another vacancy mechanism, that mechanism controls. A Board appointee to a newly created directorship serves only until the next shareholder election.

6.3 Officers

The Shareholders shall vote and exercise their lawful influence so that the Board considers appointing the following officers: [Title / Name: ____; Title / Name: ____; proceedings-record officer: ____]. Officer titles, duties, authority, and removal remain governed by the Bylaws and Board resolutions consistent with NMSA 1978, §§ 53-11-48 and 53-11-49.

6.4 Cumulative Voting

Under NMSA 1978, § 53-11-33(C), cumulative voting exists only if the Articles provide for it. The Articles [shall / shall not] authorize cumulative voting. Counsel shall test the designation arrangement against that election method and the removal protections in § 53-11-39 before execution.

7. DRAG-ALONG & TAG-ALONG RIGHTS

7.1 Drag-Along

If Shareholders holding at least [____]% of the outstanding Shares (the "Dragging Shareholders") approve a bona fide arm's-length sale of the Corporation (whether by sale of shares, merger, or sale of substantially all assets) to an unaffiliated third party, the Dragging Shareholders may require each other Shareholder to (a) vote all Shares in favor of the transaction, (b) sell the same proportion of Shares on the same per-share terms, and (c) execute reasonable transaction documents, provided that no Shareholder shall be required to give representations other than as to title, authority, and ownership, and that liability shall be several (not joint) and capped at the proceeds received. The transaction must separately satisfy every Board, class, shareholder, filing, and other approval required by the Act and the Articles; this clause supplies no missing corporate approval.

7.2 Tag-Along

If one or more Shareholders (the "Transferring Shareholders") propose to Transfer, in one transaction or a series, Shares representing more than [____]% of the outstanding Shares to a third party (other than a Permitted Transfer), each other Shareholder may elect to participate in the sale on the same terms, selling a pro rata portion of its Shares. The Transferring Shareholders shall give at least [twenty (20)] days' written notice of the proposed sale, and each electing Shareholder shall respond within [ten (10)] days.

8. PREEMPTIVE RIGHTS

8.1 Grant

Except for Exempt Issuances, before the Corporation issues any new Shares or securities convertible into Shares, it shall offer each Shareholder the right to purchase such Shareholder's pro rata portion (based on then-current ownership) on the same price and terms, so as to maintain such Shareholder's percentage ownership.

8.2 Procedure

The Corporation shall deliver written notice of the proposed issuance describing the securities, price, and terms. Each Shareholder shall have [twenty (20)] days to elect to exercise its preemptive right. Shares not subscribed for may be issued to the proposed purchaser within [ninety (90)] days on terms no more favorable than those offered to the Shareholders.

8.3 Exempt Issuances

"Exempt Issuances" means issuances (a) under a board-approved equity-incentive plan, (b) upon conversion or exercise of outstanding securities, (c) in connection with a bona fide acquisition or strategic transaction approved under Section 9, or (d) approved by Shareholders holding at least [____]% of the outstanding Shares.

9. PROTECTIVE PROVISIONS / SUPERMAJORITY

Each Shareholder agrees to vote against the following actions unless approved by Shareholders holding at least [____]% of the outstanding Shares (or unanimously where expressly selected). The Corporation separately covenants not to take an action listed below only to the extent that the covenant was validly authorized and does not displace Board authority or another mandatory approval:

(a) amending the Articles of Incorporation or Bylaws;

(b) issuing additional Shares or securities (other than Exempt Issuances) or creating a new class or series;

(c) declaring or paying any dividend or distribution other than pro rata;

(d) merging, consolidating, converting, or selling all or substantially all assets;

(e) dissolving, liquidating, or filing for bankruptcy;

(f) incurring indebtedness in excess of [$____] or granting liens on material assets;

(g) entering into any transaction with a Shareholder, director, officer, or Affiliate other than on arm's-length terms;

(h) materially changing the nature of the Corporation's business; and

(i) approving annual compensation of any officer in excess of [$____].

The parties shall place any intended greater quorum, class-vote, shareholder-vote, or Board-vote requirement in the Articles or Bylaws when the Act requires or permits that placement. No Shareholder shall demand that a director violate the duties in NMSA 1978, § 53-11-35(B).

10. INFORMATION RIGHTS

As contractual rights, the Corporation shall deliver to each Shareholder: (a) annual financial statements within [one hundred twenty (120)] days after fiscal year-end; (b) quarterly unaudited statements within [forty-five (45)] days after each fiscal quarter; and (c) upon [five (5)] Business Days' notice, reasonable access during normal business hours to identified records, subject to lawful confidentiality protections. These contractual rights are separate from NMSA 1978, § 53-11-50: Subsection B's statutory examination route generally requires six months of record ownership or at least five percent of outstanding shares, a written demand stating a proper purpose, and relevance; Subsection C preserves a court-compelled route upon proof of proper purpose; and Subsection D requires access to year-end statements only if the Corporation prepared them for a purpose.

11. RESTRICTIVE COVENANTS

11.1 Non-Competition

During the period each Shareholder owns Shares and for [____] years thereafter, no Shareholder who is also an employee, officer, or director shall, within [geographic area], directly or indirectly engage in or own an interest in any business that competes with the Corporation, except for passive ownership of less than [two percent (2%)] of a publicly traded company.

11.2 Non-Solicitation

During the same period, no such Shareholder shall solicit (a) any employee or contractor of the Corporation to terminate their relationship, or (b) any customer or supplier to cease or reduce business with the Corporation.

11.3 Confidentiality

Each Shareholder shall hold in confidence all Confidential Information of the Corporation and shall not use or disclose it except for the benefit of the Corporation, both during and after the period of share ownership.

11.4 Remedies; Reformation

The Corporation may seek injunctive or other relief available under the governing law and the proven facts. The parties do not stipulate that irreparable harm, entitlement to an injunction, or judicial reformation is automatic. Counsel shall select severance or reformation language only after confirming the law applicable to the particular covenant and relationship.

12. DEADLOCK RESOLUTION

12.1 Deadlock Defined

A "Deadlock" exists if the Board or the Shareholders are unable, after [two (2)] properly noticed meetings held at least [fifteen (15)] days apart, to reach the vote required to act on a material matter, and the inability materially impairs the Corporation's business.

12.2 Escalation; Mediation

Upon a Deadlock, the matter shall first be referred to the senior representatives of the disputing Shareholders for good-faith negotiation for [thirty (30)] days, and then, if unresolved, to non-binding mediation under Section 15.

12.3 Buy-Sell Shotgun

If a Deadlock remains unresolved [sixty (60)] days after mediation begins, any Shareholder (or 50% group) (the "Offeror") may deliver a written notice to the other (the "Offeree") stating a price per Share. The Offeree shall, within [thirty (30)] days, elect either (a) to sell all of its Shares to the Offeror at that price, or (b) to buy all of the Offeror's Shares at that same price. Failure to elect within the period shall be deemed an election to sell. The resulting purchase shall close under Section 4.3 and be paid under Section 5.3.

12.4 Other Remedies

The buy-sell procedure does not waive a remedy that cannot lawfully be waived. Judicial liquidation under NMSA 1978, § 53-16-16(A)(1) is available to a shareholder only upon proof of one of that subsection's grounds, including the specified injurious director deadlock, illegal/oppressive/fraudulent conduct, the specified two-annual-meeting shareholder deadlock, or misapplication or waste of corporate assets.

13. CERTIFICATE LEGEND

Each certificate representing Shares shall bear the following conspicuous legend. The Corporation shall send the registered owner of uncertificated Shares a written notice identifying the restriction, consistent with NMSA 1978, §§ 53-11-23(E) and 55-8-204:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TRANSFER RESTRICTIONS IN A SHAREHOLDER AGREEMENT DATED [__/__/____], A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION. THE CORPORATION MAY DECLINE TO REGISTER A TRANSFER TO THE EXTENT THE AGREEMENT AND APPLICABLE LAW PERMIT.

Under NMSA 1978, § 55-8-204, a restriction imposed by the issuer, even if otherwise lawful, is ineffective against a person without knowledge unless it is conspicuously noted on a certificated security or the registered owner of an uncertificated security is notified. The Corporation shall provide that notice. Securities counsel shall separately determine whether a federal or state securities-law legend is accurate and required; do not add one merely because this Agreement exists.

14. TERM & TERMINATION

14.1 Term

This Agreement becomes effective on the Effective Date and continues until terminated under Section 14.2.

14.2 Termination

Subject to applicable bankruptcy law, this Agreement terminates upon the earliest of: (a) the written agreement of all Shareholders; (b) completion of the Corporation's dissolution and liquidation; (c) a single Shareholder coming to own all outstanding Shares; or (d) the closing of an initial public offering or listing of the Corporation's shares on a national securities exchange. A bankruptcy filing does not automatically eliminate property of the estate or the powers of a trustee, receiver, or court.

14.3 Effect of Termination

Termination does not affect rights or obligations that accrued before termination, including any closing of a purchase already triggered. The confidentiality obligations of Section 11.3 survive termination.

14.4 Amendment

This Agreement may be amended only by a writing signed by the Corporation and by Shareholders holding at least [____]% of the outstanding Shares (or, where it disproportionately and adversely affects a Shareholder, with that Shareholder's written consent). The parties may specify that certain provisions require unanimous consent.

15. DISPUTE RESOLUTION & GOVERNING LAW

15.1 Governing Law

This Agreement is governed by and construed in accordance with the laws of the State of New Mexico, without regard to conflict-of-laws principles, and the internal affairs of the Corporation are governed by the Act.

15.2 Mediation

Before commencing arbitration or litigation (other than for injunctive relief), the parties shall attempt in good faith to resolve any dispute through non-binding mediation administered by [mediation provider] in [County] County, New Mexico.

15.3 Arbitration

Any dispute not resolved by mediation shall be finally resolved by binding arbitration administered by the [American Arbitration Association] under its Commercial Arbitration Rules, before [one (1) / three (3)] arbitrator(s), seated in [City], New Mexico. Judgment on the award may be entered in any court of competent jurisdiction.

15.4 Forum; Injunctive Relief

Notwithstanding Section 15.3, a party may request temporary or preliminary relief or specific performance in the New Mexico state district court for [County] County or, if federal jurisdiction and venue independently exist, in the appropriate United States District Court in New Mexico. The parties' consent does not create subject-matter jurisdiction or venue where law does not supply it.

15.5 Attorneys' Fees

The prevailing party in any proceeding to enforce this Agreement is entitled to recover reasonable attorneys' fees and costs.

15.6 Jury Trial Waiver

EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF THIS AGREEMENT NOT SUBJECT TO ARBITRATION.

16. GENERAL PROVISIONS

16.1 Specific Performance

Under NMSA 1978, § 53-11-34(B), the voting agreement in Section 6 is valid and specifically enforceable. For any other covenant, a party may request specific performance or injunctive relief, but availability depends on the governing law, the proven facts, and the court's equitable standards.

16.2 Further Assurances

Each party shall execute such further documents and take such further actions as may be reasonably necessary to carry out this Agreement.

16.3 Notices

All notices shall be in writing and delivered personally, by nationally recognized overnight courier, or by certified mail (return receipt requested) to the addresses on Exhibit C, and are effective upon receipt (or refusal).

16.4 Successors and Assigns; Joinder

This Agreement binds and inures to the benefit of the parties and their respective heirs, personal representatives, successors, and permitted assigns to the extent applicable law permits. No party shall voluntarily transfer Shares unless the proposed transferee first executes the required joinder. Registration and the effect of any nonvoluntary transfer remain subject to applicable law and an effective restriction.

16.5 Severability

If a provision is held invalid or unenforceable, the remaining provisions remain effective to the extent they can operate independently. A court may reform a provision only if the governing law authorizes that remedy; otherwise the invalid provision is severed to the required extent.

16.6 Entire Agreement

This Agreement, together with its Exhibits, constitutes the entire agreement among the parties regarding its subject matter and supersedes all prior understandings.

16.7 Counterparts; Electronic Signatures

This Agreement may be executed in counterparts and by electronic signature, each of which is deemed an original and all of which together constitute one instrument.

16.8 No Third-Party Beneficiaries

Except as expressly provided, this Agreement is solely for the benefit of the parties and their permitted successors and assigns.

17. SIGNATURES

IN WITNESS WHEREOF, the parties have executed this Shareholder Agreement as of the Effective Date.

THE CORPORATION:

[CORPORATION NAME], a New Mexico corporation

By: [________________________________]

Name: [____________________]

Title: [____________________]

Date: [__/__/____]

THE SHAREHOLDERS:

[________________________________]
Name: [____________________]
Date: [__/__/____]

[________________________________]
Name: [____________________]
Date: [__/__/____]

[________________________________]
Name: [____________________]
Date: [__/__/____]

18. SOURCES & REFERENCES

• New Mexico Business Corporation Act, NMSA 1978, § 53-11-1 et seq. (substantive provisions).
• NMSA 1978, § 53-11-34 — Voting trusts (Subsection A; 10-year limit) and agreements among shareholders regarding voting (Subsection B; "valid and specifically enforceable").
• NMSA 1978, § 53-11-26 — Shareholders' preemptive rights.
• NMSA 1978, § 53-11-23 — Shares represented by certificates and uncertificated shares (certificate form).
• NMSA 1978, §§ 53-11-33, 53-11-35, 53-11-36, 53-11-38, 53-11-39 — Voting and cumulative voting; Board authority and duties; number and election; vacancies; removal.
• NMSA 1978, § 53-11-44 — Solvency and measurement limits for distributions, including share purchases and purchase-price debt.
• NMSA 1978, §§ 53-11-48, 53-11-49 — Officers and removal of officers.
• NMSA 1978, § 53-11-50 — Books and records; financial reports; examination of records.
• NMSA 1978, § 53-18-8 — Unanimous shareholder action without a meeting.
• NMSA 1978, § 55-8-204 — UCC Article 8: Effect of issuer's restriction on transfer (conspicuous-notation rule).
• NMSA 1978, § 53-16-16 — Judicial / involuntary dissolution.
• NMSA 1978, §§ 24A-4-2 to 24A-4-5 — Health care practitioner agreement restrictions, permitted provisions, and practitioner-owner exclusion.
• 11 U.S.C. § 541(c)(1) — Bankruptcy-estate treatment notwithstanding transfer and insolvency restrictions.
• Official current compilations: New Mexico Compilation Commission, Chapter 53 — Corporations; Chapter 55 — Uniform Commercial Code; Chapter 24A — Health Care Code.