Umami DAO Proposal #4 - Indemnification of Multisig Operators by the DAO

Purpose The purpose of this proposal is to allow UMAMI DAO token holders to vote to protect the multisig operators associated with the Umami DAO Treasury from any expenses and judgments resulting from a potential lawsuit initiated by a hostile Umami team member named Carl at Umami Labs, LLC and related entities. The Umami DAO Treasury is made up of two wallets–the admin wallet (0xB0B4bd94D656353a30773Ac883591DDBaBC0c0bA) and the deployment wallet (0xb137d135Dc8482B633265c21191F50a4bA26145d). Each of these wallets is controlled by a three of six multisig, meaning that there are six total wallets associated with each Umami DAO Treasury wallet. Three signatures are necessary to effectuate any transaction with either wallet. Specifically, this proposal will ensure that if the multisig operators suffer expenses resulting from the litigation, the DAO will pay the judgment and not require multisig members to pay the judgment from their own pockets.

Indemnification Scope The multisig operators are parties to a Multisig Participation Agreement (MPA) based on the LexPunk DAO Defense Protocol template as implemented by Milady & Milady autonomous attorneys at law, authors of this proposal, which contains internal indemnification provisions whose scope is limited to indemnifying each other against each other as parties to the agreement. The indemnification provisions in this proposal expand the scope of the indemnification to include UMAMI token holders, therefore, Umami DAO, who will indemnify each multisig signer for any expenses incurred defending any litigation relating to their role on the multisig. Umami DAO shall indemnify each multisig signer against, hold each multisig signer harmless against, and compensate and reimburse from the Umami DAO Treasury each multisig signer for any and all claims, liabilities, damages, and losses suffered or incurred, or reasonably likely to be suffered or incurred by such multisig signer in connection with the potential lawsuits initiated by Carl at Umami Labs, LLC or any affiliate entities including but not limited to Umami Holdings and Umami Foundation, and from such multisig signer’s operation of the multisig, except to the extent arising in connection with such multisig signer’s fraud, gross negligence, or willful misconduct. Any damages, fees or costs awarded to, and actually recovered by, an indemnified party relating to damages, fees or costs reimbursed to such party hereunder shall be promptly paid to the DAO.

Proof of Indemnifiable Expenses In order to claim indemnification protection under this proposal, a multisig signer will be required to present proof of expense incurred to the other signers of the multisig. This proof shall be presented in a cryptographically secure fashion, and the proof shall not be retained by the other signers of the multisig. Proof shall be deemed sufficient if approved by the necessary number of signers required to approve a transaction. Decisions regarding indemnifiable expenses are final and binding based on this paragraph alone. The exact individuals on the multisig at the time of events should be specified to be clear whose legal costs are being covered.

Indemnification Payment Indemnification shall be paid only to the wallet address operating the multisig and requesting the indemnification. In the event a person is removed as an operator of the multisig, any indemnification request received within fifteen (15) calendar days from the date of such person’s removal shall be considered an indemnifiable expense if otherwise approved by the multisig operators. Milady & Milady (M&M) is taking no payment from the DAO or multisigners for this proposal.

Re-Ratification Requirement In the event that total indemnifications under this resolution exceed a notional value of $500,000.00 (USD), the community shall be required to re-ratify this proposal prior to any further expenses being paid.

Legal Validity Upon the successful passage of this proposal, it shall constitute a legally binding agreement between Umami DAO and the multisig operators, providing the indemnification protection described herein to them against any litigation initiated by Carl at Umami Labs, LLC and related entities. Umami DAO shall fulfill its obligation to indemnify the multisig operators, as described herein, against any judgment arising from the said litigation.