ATX DAO LEGAL WRAPPER

ATX DAO LEGAL WRAPPER PROPOSAL

Summary

Form an Unincorporated Nonprofit Association (“UNA”) around the ATX DAO for the purposes of gaining legal existence; payment of taxes (if applicable); and limitation of liability for members (while maintaining member anonymity for members who do not receive compensation from the DAO). This proposal will be live on December 28, 2023 available for voting and will be open for 4 days.

Abstract

Overview

This proposal would form an Unincorporated Nonprofit Association for the purposes of providing legal existence to ATX DAO for the purpose of paying taxes, if applicable, and improving liability protections to members.

An UNA requires that the purpose of the DAO be nonprofit. We believe this aligns with the mission of ATX DAO to foster community engagement with emerging technology in the blockchain industry.

Association Agreement

The Association Agreement (contained in the proposal below) establishes the governing principles of the DAO and is a combination of the Association Agreement itself, the on-chain Governance Protocol (e.g., smart contracts establishing quorum, voting, control of the treasury and control of the ATX DAO Protocol (as defined on Appendix A to the Association Agreement)), and any validly enacted Governance Proposals (whether on-chain or off-chain) in the future.

Specific Authorization of Administrative Authority and Compensation

The basic philosophy of this UNA is to utilize governance proposals for the membership to collectively make all operational decisions, while establishing the minimal amount of authority and authorization as necessary to enact those decisions by members (e.g., the administrators).

As outlined in the Association Agreement, administrators are the primary agents of the UNA and are empowered to perform specific tasks on behalf of the UNA as authorized by the DAO. Members have no authority to act on behalf of the DAO except for participation in governance decisions and the administrators do not possess the authority to act beyond what is authorized by the DAO or to utilize broad discretion in their decision-making. Accordingly, it is necessary that ongoing Governance Proposals be made and validly executed to allow administrators to be authorized to sign contracts, interact with 3rd party advisors (e.g., accounting, tax preparation and legal), sign tax returns, obtain a bank account and make necessary payments on behalf of the DAO.

Depending on circumstance, the performance of these tasks may justify compensation which would be authorized as part of the Governance Proposal.

Specific Authorization of Administrative Authority & Compensation

This proposal authorizes Megan Murray, Mason Lynaugh and Roberto Talamas to act as administrators of the UNA to take the necessary steps for the formation and operation of the UNA, including to:

• Attain an EIN;
• Obtain legal and tax guidance for ATX DAO;
• If necessary, elect corporate taxation and sign, file and pay taxes (including the collection of necessary informational reporting);
• Attain a registered agent, if desired, for service of mail forwarding and service of process (including filing the service of process documentation with the Texas Secretary of State’s office); and
• Attain a bank account.

As outlined in the Association Agreement, administrators are narrowly empowered to perform specific tasks and do not contain the authority to bind the DAO to contracts (absent specific authorization) or utilize broad discretion in their decision-making. In the event additional authorization is required beyond that granted in this Governance Proposal, an additional Governance Proposal must be made and validly executed.

ATX DAO Membership Disclosure

The following Membership Disclosure will be displayed on ATX DAO’s website and any token agreements:

By using the $ATX non-fungible token (NFT) to participate in the governance and operations of ATX DAO, the holder of this token agrees to be subject to the terms of ATX DAO’s governing principles, including as a member of its entity structure. ATX DAO was organized as a Texas UNA on January 1, 2023.

Participation in the governance and operations of ATX DAO includes, but is not limited to, utilizing the $ATX token to: 1) vote or propose governance proposals (either directly or through delegation); 2) attend exclusive members-only events; 3) or interact with the ATX DAO community.

Except as otherwise provided in ATX DAO’s governing protocol, the membership interests or rights thereunder represented by the $ATX token are freely transferable to another person through its conveyance.

Except as otherwise provided in ATX DAO’s governing protocol, a member shall be deemed to have resigned from ATX DAO upon disposal of all of such member’s $ATX tokens.

Proposal - Association Agreement

ATX DAO is an Unincorporated Nonprofit Association under chapter 252 of the Texas Business Organizations Code (“BOC”). This Association Agreement is referred to in this document as the “Agreement.” Capitalized terms used in the Agreement marked in bold text are defined in Appendix “A” to the Agreement.

Article 1 Name

The name of this Association and the name by which it will be known is: ATX DAO (referred to below as the “Association”).

Article 2 Purpose

The objectives and purposes of the Association shall be as follows:

1. The Association is established as an organizational framework for community engagement, collective decision-making, and innovation in order to pursue the common nonprofit purpose of unifying a community of blockchain professionals in Texas and the education and onboarding of local business owners to blockchain.
2. The Association has the power to do all things necessary or convenient to carry on its activities or affairs as an Unincorporated Nonprofit Association (“UNA”) under the laws of Texas that are in furtherance of its purposes as set forth in Paragraph 1 of this Article 2 and as otherwise permitted by this Agreement.

Article 3 Membership

1. A Person shall become a Member of the UNA by holding an $ATX token.
2. Members agree to abide by the established Governing Principles of the Association.
3. A Member shall be deemed to have resigned as a Member of the Association upon the disposal (voluntary or involuntary) of all Membership Interests (e.g., the $ATX token(s) conveying their voting rights within the Association).
4. The withdrawal of a member by transfer of all or any of its Membership Interests shall not dissolve the Association and the Association shall be continued.
5. A Member’s Membership Interest or any right thereunder is freely transferable to another person through conveyance of the $ATX token representing such Membership Interest unless other restrictions on the Membership Interests apply.
6. A Member is representing themselves to be the rightful owner of their Membership Interest when engaging with the Association as a Member.

Article 4 Rights and Duties of Members

1. Members have no ownership rights of the property of the Association via their Membership Interest.
2. A Member of the Association is not an agent or representative of the association solely by reason of being a Member and all fiduciary duties are waived.
3. A Member of the Association has no authority to bind the association to a contract, sign documents, or act in any representative capacity on behalf of the DAO absent specific authorization from a validly executed Governance Proposal as set forth in this Agreement.
4. To the extent permitted by applicable law, any debts, obligations and liabilities arising from the DAO’s operations, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Association and no Member or Administrator shall be obligated personally for any such debt, obligation or liability solely by reason of being a Member of the Association or participating in the governance of the DAO.
5. Members are expected to abide by the Association's Internal Code of Conduct.

Article 5 Voting; Governing Principles

1. As defined in Appendix “A”, an UNA’s Governing Principles are a culmination of all the agreements (i.e., this Agreement, the ATX DAO Protocol, or executed Governance Proposals). As Governance Proposals are enacted, elements of the existing ATX DAO Protocol and this Agreement may be superseded by validly executed Governance Proposals.
2. As part of its Governing Principles, the Association will provide for its governance through Smart Contracts, referenced collectively as the ATX DAO Protocol.
3. The Association will retain control of the Smart Contracts comprising the ATX DAO Protocol via Governance Proposals of its Members.
4. Voting procedures through Smart Contracts, referenced collectively as the Governing Protocols, provide the following: a. proposals from Members in the Association for upgrades, modification, or addition to software systems / protocols; b. proposals from Member to appoint Administrators to perform designated functions on behalf of the Association; c. proposed changes to the Association’s Governing Principles; d. quorum requirements for validly executed Governance Proposals; e. votes necessary for a Governance Proposal to be enacted; f. distributions of the Association’s assets to facilitate transaction in furtherance of the Association’s common nonprofit purpose; and g. any other matters of governance or activities within the purpose of the Association.
5. In the event this Agreement conflicts with the Governance Proposals – the Governance Proposals control.

Article 6 Administrators; Agents

1. This Association is organized for decision-making to be performed through its Governing Proposals. The Association may grant authorization for specific delegated tasks through a validly executed Governance Proposal and any separate contract between the Association and Administrators.
2. An Administrator has no authority to act on behalf of the Association beyond the specific authorization granted through a validly executed Governance Proposal or otherwise in accordance with the Governing Principles.
3. A Member becomes an Administrator by assenting to perform the obligations established within a validly executed Governance Proposal or otherwise in accordance with the Governing Principles.
4. Depending on the duties and obligations contained within the grant of authority establishing Administrators, an Administrator may have fiduciary duties to the Association which should be explicit to the grant of authority when involving compensation.
5. Absent specific limitations within the validly executed Governance Proposal, an Administrator can resign by presenting notice to the Association membership.
6. Upon resignation or the completion of their period of authority, an Administrator is not required to dispose of any Membership Interests in the Association and can continue as a Member upon resignation as an Administrator.

Article 7 Compensation

1. Except as otherwise provided in subsection 2. Of this Article, the Association may not pay dividends or make distribution to a Member or Administrator.
2. In accordance with and subject to the laws of Texas, this Association may: a. pay reasonable compensation or reimburse reasonable expenses to its Administrators and other Member Contributors, agents and Persons outside the organization for services rendered, including with respect to the administration and operation of the Association; b. confer benefits on its Members or Administrators in conformance with its common nonprofit purpose or purposes; and/or c. make distributions as a cooperative established as an UNA.

Article 8 Dissolution; Wind-up

1. This Association has a perpetual duration and may only be dissolved by any of the following methods: a. upon a validly executed Governance Proposal; b. three years of inactivity, per Texas law; or c. by court order.
2. After dissolution, the Association continues in existence until its activities have been wound up and it is terminated pursuant to Paragraph 3 and 4 of this Article.
3. The Association continues to exist beyond dissolution only for the purpose of winding up.
4. In winding up the Association, the members: a. Shall discharge the Association’s debts, obligation and other liabilities, settle and close the Association’s business, and marshal and distribute any remaining property to another entity or persons with similar nonprofit purposes, as determined by a validly executed Governance Proposal; b. May, as a result of a validly executed Governance Proposal, appoint an Administrator or Administrators to wind up the Association and: i. preserve the Association’s operations and property as a going concern for a reasonable time; ii. prosecute and defend actions and proceedings, whether civil, criminal, or administrative; iii. transfer the association’s property; iv. settle disputes by mediation or arbitration; v. receive reasonable compensation for services rendered in winding up the association; and vi. perform other acts necessary or appropriate in winding up.

Article 9 Rights of Members and Administrators to Information

The BOC Title 6, Ch. 252 requires UNAs to maintain books and records of account for three years after each fiscal year and make such books and records available on request to members of the Association for inspection and copying. The Members shall make any such request for the Association to prepare information for Members through a validly executed Governance Proposal or internal procedures, as established by the Administrators, from time-to-time and made available to the Members via the online members portal. Further, Members may collect and present any information that is publicly available on the blockchain.

Article 10 Service of Process

The Association may file in the Texas office of the Secretary of State, a statement appointing an agent authorized to receive service of process.

Article 11 Advancement of Expenses

1. The Association may reimburse a Member or Administrator for authorized expenses reasonably incurred on behalf of the Association through a validly executed Governance Proposal to the extent allowable by the laws of Texas.
2. The Association may allocate and disburse funds to the Administrators through a validly executed Governance Proposal to be used to fund activities that have been authorized by a validly executed Governance Proposal.

Article 12 Agreement to Arbitrate

Any dispute, claim or controversy arising out of, or relating to, the activities of the Association and its Members, Administrators, and/or agents for the breach, termination, enforcement, interpretation, or validity of the Governing Principles, including the determination of the scope or applicability of this Agreement to arbitrate, shall be determined by arbitration in Austin, Texas before one arbitrator.

The arbitration shall be administered by AAA pursuant to its Commercial Arbitration Rules and Procedures – Expedited Procedures. Judgment on the Award may be entered in any court having jurisdiction. This clause shall not preclude parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction.

Although final costs would be subject to the results of arbitration, any advance costs associated with the arbitration proceedings would be shared equally by both parties.

Article 13 Miscellaneous

1. Separability of Provisions. Each provision of this Agreement shall be considered separable and, if for any reason, any provision or provisions herein are determined to be invalid, unenforceable, or illegal under any existing or future law, such invalidity, unenforceability, or illegality shall not impair the operation of, or affect those portions of, this Agreement which are valid, enforceable and legal.
2. Governing Law. This Agreement shall be governed by, and construed under, the laws of the State of Texas (without regard to conflict of laws principles), all rights and remedies being governed by said laws.
3. Amendment. This Agreement may not be modified, altered, supplemented, or amended except by a validly executed Governance Proposal.
4. A claim for relief against the Association does not abate merely because of a change in its Members or Persons authorized to administer the affairs of the Association.
5. Notwithstanding any other provision of this Agreement, to the extent that, at law or in equity, the Administrators, Members or any other persons having duties (including fiduciary duties) to the Association or to any Member, all such duties (including fiduciary duties) are hereby eliminated to the fullest extent permitted by the law and replaced with the duties expressly set forth herein or as expressly established by a validly executed Governance Proposal.

This document (and an accompanying appendix that includes definitions for various terms used in the proposal) may be viewed here: https://drive.google.com/file/d/1ObWtN9kLGOp71Fjy_yv8B2o4vKCOlQog/view?usp=sharing