TO DISCUSS: proposed changes to the DAO Operating Agreement.
CHANGE REQUEST 1: Add some requirement to maintain DAO Diversity: to maintain some balance among the categories of members. So that for example a single type of business does not dominate the DAO decision making process.
For reference, here are the existing sections that are related to DAO Eligibility:
- Section 2.10 Membership Size and Composition. The DAO will restrict initial membership to no more than 100 total Members who are Stakeholders in the asset disposition sector…
- Section 4.01 Approval. Initial Membership is limited to Primary and Secondary ITAD Stakeholders …
The following statement was included in an early draft of the DAO Agreement, but was (perhaps inadvertently) not included in the final version:
*"Consideration to the overall DAO membership should attempt to ensure geographic diversity, as well as a diversity of business types within the sector."add “diversity” qualification”
For now, perhaps we just use the original statement?
CHANGE REQUEST 2. Qualify “Stakeholders”
The existing agreement does not provide a good set up rules for determining “who is a stakeholder”.
We need to come up with some criteria. Because those outside the industry who join the DAO for financial reasons only should not be part of the governance.
CHANGE REQUEST 3. 4.08 Delete “After the vesting period, some continued stake will be required to maintain Membership rights. The amount of this continued stake will be voted and decided on in a future amendment to this agreement.”**
CHANGE REQUEST 4. Add 4.09 No Further Contributions. Except as set forth in Section 4.08, no Member shall be required to make any additional Capital Contribution.**
CHANGE REQUEST 5. Add Indemnification section as per below:
Indemnification: To the fullest extent permitted by law from time to time in effect:
- The Company shall indemnify and hold harmless the Members and their respective directors, trustees, shareholders, partners, officers, employees, agents against all costs, liabilities, claims, expenses, including reasonable attorneys’ fees and disbursements, and damages (collectively “Losses”) paid or incurred by such Person in connection with the conduct of the Company’s business; and
- Each Person who at any time is, or has been, a Member (an “Indemnitee”), is threatened to be, or is made a party to any actions, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or it is, or was, a Member shall be indemnified against all Losses actually and reasonably incurred in connection with any such pending, threatened or completed action, suit or proceeding.
- An Indemnitee shall be entitled to receive, upon application therefore, advances from the Company to cover the costs of defending any pending, threatened or completed claim, action, suite or proceeding against it for Losses in connection with which it would be entitled to indemnification under this Article, provided that such advances shall be repaid to the Company (with interest at the Prime Rate) if the Indemnitee receiving such advance is found by a court of competent jurisdiction upon entry of a final judgment to have violated any standard which would preclude indemnification hereunder.
- The rights of and Indemnitee set forth in this Article shall not be exclusive of any other rights which it may be entitled, whether by separate agreement or otherwise, nor shall such rights limit or affect any other such rights. All rights of an Indemnitee under this Article shall survive the dissolution of the Company and any Withdrawal of such Indemnitee as a Member and shall inure to the benefit of his, her or its heirs, personal representatives, successors and assigns.
- Notwithstanding anything contained herein to the contrary, any amount to which an Indemnitee may be entitled under this Article shall be paid only out of the assets of the Company and any insurance proceeds available to the Company for such purposes. No member shall be personally liable for any amount payable under this Article or to make any Capital Contribution to enable the Company to make such payment.