Special Council Charter

The Role of the Special Council of House of Wizards Foundation (the “Foundation”) (such Special Council of the Foundation, the “Special Council”)
1. The Special Council plays a supporting and coordinating role for work contributed by the House of Wizards network’s decentralized community of users and holders of the HOW Tokens (as defined below) ( the “Community” or the “Cult Members”). The Foundation is a Cayman Islands Foundation Company established for the benefit of the Community. However, it is the Community’s responsibility to develop the ecosystem (the "Network") and make proposals to guide the long-term strategy of the Foundation.
2. "HOW Tokens" means the Forgotten Runes non-fungible tokens represented by the following smart contract addresses:
  1. Wizards: 0x521f9c7505005cfa19a8e5786a9c3c9c9f5e6f42;
  2. Warriors:0x9690b63eb85467be5267a3603f770589ab12dc95;
  3. Soul: 0x251b5f14a825c537ff788604ea1b58e49b70726f;
  4. Pony:0xf55b615b479482440135ebf1b907fd4c37ed9420; and
  5. Beasts:0x8634c23d5794ed177e9ffd55b22fdb80a505ab7b.
3. Special Council Members (as defined below) are encouraged to advocate for the interests of the stakeholder groups they represent as well as the welfare of the Network, the Community and all other stakeholders that are impacted by the Foundation’s mission.
4. “Special Council Members” means those nine (9) persons who hold at least one (1) HOW Token in the warrior, wizard, pony, soul or beast collections, appointed by a plurality vote of Voting Cult Members (as defined below), pursuant to and evidenced by the CIP Process (as defined below), with the Initial Council (as defined in the Amended and Restated Memorandum and Articles of Association of the Foundation dated November 2023 (the “Foundation Articles”) in the first instance, appointed by:
  1. the directors of the Foundation (the “Directors”), in respect of eight (8) initial members of the Special Council; and
  2. a plurality vote of Voting Cult Members (as defined below), pursuant to and evidenced by the CIP Process (as defined below), in respect of one (1) initial member of the Special Council,
  each serving until a Special Council Member either resigns or gets voted out via a Proposal (as defined below).
e. Special Council Members should act in the best interest of the Community, however, they are not fiduciaries for the Community. This Charter constitutes the "Bylaws" for the purposes of the Foundation Articles.
Relationship Between the Special Council and the Foundation Representatives
1. The Special Council is the primary governing body of the Foundation, including the Foundation’s treasury (the “Treasury”). The Directors and supervisors of the Foundation (the “Supervisors”) (each, a “Foundation Representative”) each have responsibilities and obligations under Cayman Islands law, the Foundation Articles and this Charter. For the avoidance of doubt and notwithstanding anything to the contrary herein, no Foundation Representative may take actions, directly or indirectly, including at the instruction of the Special Council, which violate the laws of the Cayman Islands.
2. To the extent there is ever a conflict between the decisions made by the Directors and/or Supervisors and the Special Council, subject to the Director Veto Powers (as defined herein), the Special Council will prevail, unless a different outcome is required under Cayman Islands law, the Foundation Articles or this Charter. To the extent there is ever a conflict between the decisions of the Foundation Representatives and a majority Voting Cult Member vote in accordance with the voting requirements described in Section 12 and Voting Mechanism (as defined below), then such majority Voting Cult Member vote will prevail, unless a different outcome is required under Cayman Islands law, the Foundation Articles or this Charter.
3. The Foundation has engaged with the Foundation Representatives to provide services as Directors and Supervisor as required by Cayman Islands law. In accordance with the terms of the Foundation Articles and this Charter and subject to Cayman Islands law, the Foundation Representatives are required to act at the direction of the Special Council in respect of certain matters.
4. The Directors must (i) be at least eighteen (18) years of age, (ii) with no disqualifying attributes under Cayman Islands Law, (iii) with no personal financial insolvency for the past ten (10) years, (iv) with no convictions or guilty pleas for mishandling or embezzlement of funds of any organization, and (v) have not been involuntarily removed, with cause, or forced to resign from any directorship, or similar executive or high-level position, within any organization. The Supervisor must have no disqualifying attributes under Cayman Islands law.
5. The Directors shall observe, implement, carry out, act upon, and execute any and all Proposals (as defined below) passed in accordance with this Charter and the Foundation Articles, provided that any Directors may veto a Proposal (as defined below) or place any limitations on its observation and implementation as a Director in its discretion deemed necessary or appropriate to ensure compliance with (the “Director Veto Power”):
  1. any fiduciary duties to the Foundation;
  2. statutory requirements of Cayman Islands laws or the laws or regulations of any jurisdiction;
  3. the Foundation Articles;
  4. to prevent any harm (including reputational harm) to the Foundation; and/or
  5. where applicable and necessary, for entering into or complying with any agreements or arrangements on behalf of the Foundation.
6. The Special Council shall notify the Directors of the outcomes of Proposal (as defined below) votes and upon the receipt of such notice, the Directors are authorised to take any actions reasonably necessary on behalf of the Foundation to give effect to a Proposal including passing any Director resolutions to memorialise such Proposal (as defined below).
7. Special Council Members should ensure that the Foundation has sufficient authority and resources, including funding, to execute upon the Foundation’s objects as set out in the Foundation Articles, meet the Foundation’s obligations under Applicable Law (as defined below), and satisfy the Foundation’s contractual obligations entered into with the approval of the Special Council.
CIP Process
1. "DAO Quorum Requirement" means the following:
  1. in respect of change in logo or grants below US$12,500 ("Level One Matter"), 400 HOW Tokens;
  2. in respect of change of protocol or bylaws or grants above US $12,500 but below US $25,000 ("Level Two Matter"), 1,200 HOW Tokens;
  3. in respect of fundamental changes in the protocol or winding up of the Foundation or grants of US $25,000 or more ("Level Three Matter"), 3,500 HOW Tokens,

or such number of HOW Tokens as is updated from time to time to reflect any changes as voted on by the Voting Cult Members or the Special Council in accordance with these Bylaws,

b. "Majority Vote" means the following (as amended from time to time by the Voting Cult Members or the Special Council in accordance with these Bylaws):

in respect of a Level One Matter, the CIP receives a simple majority affirmative vote of Voting Cult Members;
in respect of a Level Two Matter, the CIP receives a 60% majority affirmative vote of Voting Cult Members;
in respect of a Level Three Matter, the CIP receives a 70% majority affirmative vote of Voting Cult Members,

in accordance with the voting requirements set out in Section 12 of these Bylaws.

c. Cult Members who hold one or more HOW Tokens in the warrior, wizard, pony, soul or beast collections (such holders of those HOW Tokens, the "Voting Cult Members") may advance and vote on Community improvement proposals, including either multidisciplinary projects that benefit the Community or process and/or governance of the Foundation (“CIPs”) relating to the Network (the “CIP Process”), excluding, for the avoidance of doubt, SCPs (as defined below) and subject to any additional governance review processes adopted by the Community and subject to any additional governance review processes adopted by the Community (“Governance Review Processes”). The CIP Process is incorporated by reference into this Charter.

d. There are multiple steps in the life cycle of submitting a CIP:

Submission of CIP topic in the Discord or other governance forum adopted by the Community (the “Governance Forum”)
Review of CIP topic by the relevant Governance Delegate (as defined below) to ensure the proposal meets Community guidelines;
Draft CIP is published on the Governance Forum for Community discussion and to be reviewed in accordance with the relevant Governance Review Process for a period of ten (10) days subject at all times to the Director Veto Powers;
After the draft CIP has been published on the Governance Forum for a period of ten (10) days, the author may make updates to the draft CIP;
CIP is advanced in the Governance Forum; and
Formal CIP is published on Snapshot or other voting mechanism adopted by the Community (the “Voting Mechanism”) for Voting Cult Member voting at the next monthly vote.

e. All such CIPs, comments, requests, or other related forms of participation in governance are purely advisory and non-binding upon the Special Council, Foundation, Director(s), Supervisor or Cult Members, unless and only to the extent: (i) the CIP receives the relevant Majority Vote; (ii) the CIP has satisfied all required governance procedures, formalities, including the CIP Requirements (as defined below) for a final Voting Cult Member-approved CIP as set forth in this Charter; (iii) the DAO Quorum Requirement is met; and (iv) the formal CIP is published on the Governance Forum.

f. Until such time as a Governance Forum is formally adopted by the Community, the initial Governance Forum shall be Discord. The CIP Process is in place to ensure CIPs are well thought out, include necessary details regarding the scope of the project, and are in the best interest of the Community and the Network. For any CIP to advance from the Governance Forum to the Voting Cult Member voting stage, it must include the following details (the “CIP Requirements”):

Title: a descriptive title that effectively summarizes the request;

Team: author (the project lead) and team information including why the team considers itself a good fit for the project;
Summary: summary of the project;
Objective: goals and rationale, specifically:

(A) what the goals of the project are and how it benefits the Community:

(B) details of the anticipated success of the project;
Specification and Implementation: specifications, specifically a detailed breakdown of the project or process, timeline, and steps to implement the proposal including resources required; and
Cost: total cost and payment schedule (if applicable) denominated in ETH or USDC.

The CIP author can add additional fields or details to the CIP Requirements if necessary to fully communicate the intentions, specifics, and implications of the CIP;

g. CIPs may be withdrawn and exit the CIP Process in any of the following manners:

specifically requested by the CIP author;
a time period of inactivity or no posts on the CIP of ten (10) days;
the DAO Quorum Requirement is not met within ten (10) days from the date the CIP is published; or
the CIP is rejected during or at the conclusion of the Voting Period (as defined below).

h. CIPs that do not make it through the CIP Process may be resubmitted and should include:

the link to the original CIP;
the reason(s) it was not approved previously; and
the changes that have been made and the reason it should now be approved.
Further guidelines for the CIPs is set out here: https://forgottencouncil.notion.site/Community-Proposals-31ddd01c59fd4402a04fff12e24573a7.

j. CIPs can be published for voting by the Voting Cult Members:

on a monthly basis in respect of any large projects or governance matters; and
on a quarterly basis for any more strategic items including how much Ministries (as defined below) get funded per quarter.
Authority of the Special Council
1. The Special Council has the authority to engage in the following activities, which it may delegate, without limitation, to other participants in the Community, the Foundation Representatives, or the appointees of Foundation Representatives:
  1. Pursuant to CIPs, perform protocol improvements and adjustments to economic parameters with respect to HOW Token; provided that, in the instance of an Emergency Meeting as described in Section 11(h) below, the Special Council may perform protocol improvements and adjustments to economic parameters with respect to HOW Token pursuant to a majority vote of Special Council Members.
  2. Coordinate certain emergency protocol operations on behalf of the Community or the Foundation, including but not limited to, forks and responding to imminent security threat to the Network, the Foundation and the Community.
  3. Fund transactions by the Foundation (“Transactions”) from the Treasury, including, but not limited to, grants to support Community development, commercial agreements and employment contracts.
  4. Make changes to this Charter and the Foundation Articles if the Special Council believes such changes would improve the Special Council’s ability to fulfil its obligations under the Foundation Articles, this Charter or applicable laws (the “Amendment Authority”). Special Council Members agree in good faith to exercise such Amendment Authority pursuant to an SCP unless such Amendment Authority must be exercised at an Emergency Meeting as described in Section 11(h) below.
  5. Adopt or amend official Network-level policies, codes of conduct, community guidelines, terms and conditions, or official governance procedures.
  6. Have a general oversight over the Foundation and review budgets and financial statements and reports for the Foundation.
  7. Change the DAO Quorum Requirement or Majority Vote.
  8. Nominate for appointment by the Directors, any company, firm or person or body of persons to be the attorney or attorneys or duly authorised signatory or signatories of the Foundation for the purpose of executing any documents, deeds, instruments and/or agreements on behalf of the Foundation where the maximum value of such matters to be transacted under the relevant document, deed, instrument and/or agreement does not exceed US$10,000. Notwithstanding the foregoing:
    
    (A) the attorney or duly authorised signatory may not enter into any indemnification agreements or any debt agreements on behalf of the Foundation; and
    
    (B) the Special Council shall procure that any attorney or duly authorised signatory so appointed shall provide the Directors with copies of any and all documents they sign in their capacity as attorney or duly authorised signatory of the Foundation.
b. The Special Council may engage in such activities outside of the SCP Process at its discretion pursuant to Sections 5, 11 and 12 herein, so long as such activities do not contradict the terms set forth in any CIP approved by Voting Cult Members, this Charter, or the Foundation Articles; provided that, any such activities:
1. undertaken pursuant to Section 4(a)(viii); or
2. which would result in:
  
  (A) the expenditure of more than USD$6,000 from the Treasury on an annual basis; or
  
  (B) the transfer, sale, or incursion of debt or any lien(s) on: (x) substantially all of the Foundation’s assets, of more than USD$6,000 from the Treasury on an annual basis; and/or (y) the intellectual property of the Foundation;
must be proposed pursuant to an SCP and be carried out pursuant to the SCP Process (as defined below). Notwithstanding the foregoing, where such activities relate to the corporate governance and maintenance of the Foundation as required by any Applicable Law, the Special Council may engage in such activities outside of the SCP Process and incur expenditure above the amounts set out in 4(b)(ii)(A) and (B) above.

c. Each Special Council Member carries equal authority. Special Council Members may delegate their individual or collective authority and may assign responsibilities and duties to other Community participants, including sub-committees, working groups, Ministries and service providers (the “Governance Delegate”) to advise and support the Foundation in the growth, development, and integrity of the Network, as determined and approved by the Special Council from time to time, subject to the voting requirements as described in Section 12 below.

d. The Special Council may only carry out the following actions upon unanimous consensus of all of the Special Council members pursuant to the SCP Process:
1. recusal by a Conflicted Member (as defined in the Conflict of Interest Policy (as defined below)); and
2. removal of a Special Council Member.
e. Any Director may, from time to time, request that the Special Council provide information on all or any activities conducted by the Special Council.
Actions of the Special Council and SCP Process
1. All actions within the Special Council’s authority, unless otherwise determined by the Special Council or delegated by the Special Council to the Community, the Foundation Representatives, or the appointees of the Foundation Representatives, will only occur after the presentation by a Special Council Member at a Special Council meeting or in a written proposal (an “SCP”, together with the CIPs, the “Proposals”). All SCPs, comments, requests, or other related forms of participation in governance are purely advisory and non-binding upon the Special Council, Foundation, Community or Cult Members, unless and only to the extent (i) an SCP receives a simple majority affirmative vote of Special Council Members; (ii) the SCP does not conflict with any Applicable Law (as defined below), this Charter or any other applicable governance requirements adopted by the Community and (iii) the SCP is published with the relevant Meeting Notes or otherwise on a public governance forum (the “SCP Process”).
2. Pursuant to the SCP Process each Special Council member vote carries equal authority. The Special Council’s decision making may be expressed through (i) Snapshot voting or (ii) any other Voting Mechanism. An SCP will not be adopted if it receives less than a simple majority affirmative vote of Special Council Members, including if it receives a tie vote, subject to the following exceptions:
  1. Removal Proposals (as defined below); and
  2. SCPs involving Conflicted Members or Absent Members (as defined below).
3. Any authority not expressly or impliedly granted to the Special Council is expressly reserved by the Cult Members.
4. Once the Foundation has implemented the required tooling, the outcome of all Proposal votes will be recorded on the Network as a transaction published by a multisignature wallet, which will be a 5-of-9 smart contract controlled by the Special Council (the “Special Council Multisig”). Certain such Proposal votes may be recorded in an obfuscated way, including to protect Non-Public Items (as defined below), either permanently or in a form that may be later disclosed.****
Governing Principles

The Special Council will strive to act in accordance with the following governing principles:
1. represent the will of the community;
2. uphold the standards and codes set forth in this Charter; and
3. empower Cult Members with the opportunity, the resources, and the inspiration to nurture their inner wizards.
Responsibilities

As part of their service to the Community, each Special Council Member will (in addition to the responsibilities set out here https://forgottencouncil.notion.site/The-Forgotten-Council-ca61b73b56d5479fb3375a88aaf95f68):

Adhere to this Charter and other applicable governing documents of the Foundation.
Sign transactions from the Special Council Multisig, once implemented, to ensure that an approved Proposal receives sufficient signatures, even if the Special Council Member had voted “no” with respect to that Proposal.
Attend meetings, vote on SCPs, and attend unofficial Community events hosted by the Foundation and Cult Members. Special Council Members may choose the frequency with which they perform these activities at their own discretion, bearing in mind that if they fail to adequately represent the Community due to infrequency of participation, they may be removed as a Special Council Member by other members of the Community pursuant to Section 9.
Attend Emergency Meetings to rapidly respond to an imminent security threat to the Network, protocol or Community.
Ensure that they are adequately informed on SCPs and CIPs.
Share contact information with the Foundation such that they can be summoned for Emergency Meetings.
Assist with ensuring compliance with any applicable policies for the Foundation, including but not limited to, the conflict of interest policy for the Foundation (the “Conflict of Interest Policy”).
Announce as soon as possible if they will be temporarily unable to fulfil their duties, for example, due to vacation, illness, or personal emergencies.
Understand the Foundation’s obligations under Applicable Law, including federal, state, and foreign laws, as well as the relevant regulatory schemes.
Maintain and monitor relevant websites, forums, or other governance mediums and communications.
Elect, nominate, promote, hire, or contract with individuals or organizations into important administrative, Special Council, engineering, legal, or other roles established by the Special Council to serve the Community.
Member Code of Conduct
1. Compliance with the Law.
  1. Acting ethically and obeying the law, both in letter and spirit, are among the Foundation’s, and the Special Council’s, core values. Special Council Members should understand the legal and regulatory requirements applicable to their area of responsibility, including federal, state, and foreign laws, as well as the relevant regulatory schemes (collectively, “Applicable Law”).
  2. Special Council Members should ask their own legal counsel for advice when they are uncertain about Applicable Law.
2. Diversity, Inclusion and Equity.
  1. The Special Council strives to create a safe and welcoming environment for all would-be community members, regardless of age, gender, ethnicity, religion, disability, sexual orientation, education, national origin, or any other differentiating factors. The Special Council is committed to maintaining an environment in which all individuals are treated with respect and dignity. The Special Council expects that all relationships among Special Council Members, the Foundation, and Cult Members will be free of unlawful bias, prejudice and harassment.