Section 1. The Association shall indemnify each Director and each officer who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Association) by reason of the fact that he or she is or was a Director or officer of the Association, or who is or was serving at the request of the Association against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Association and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Association, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.

 

Section 2. Any indemnification under paragraph (a) of this Article (unless ordered by a court) shall be made by the Association only as authorized in the specific case upon a determination that indemnification of the Director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in paragraph (a). Such determination shall be made: (1) by the Board of Directors by a majority vote of a quorum consisting of Directors who were not parties to such action, suit or proceeding; or (2) if such a quorum is not obtainable, or, even if obtainable but a quorum of disinterested Directors so directs, by independent legal counsel in a written opinion; or (3) by the vote of the Association membership in a special meeting called for that purpose.

 

Section 3. The Board of Directors may authorize a loan, in advance of the final disposition of such action, suit or proceedings, for expenses incurred in defending a civil or criminal action, suit or proceeding upon receipt of a letter of request and documentation of such action, suit or proceeding as defined in Section (a) of this Article, from or on behalf of the Director or Officer. Included in this request shall be a promissory note from the Director or Officer to repay such amount, unless it shall ultimately be determined that he or she is entitled to be indemnified by the Association as authorized in this Article

 

Section 4. The indemnification provided by this Article shall not be deemed exclusive of any other rights to which a Director or Officer seeking indemnification may been titled under any governmental statute, provision in the Association's Articles of Incorporation, Bylaws, agreement, or vote of members or of disinterested Directors, both as to action in his or her official capacity while holding such office, and shall continue as to a person who has ceased to be a Director or Officer and shall inure to the benefit of the heirs, executors and administrators of such a person.

 

Section 5. The Association shall purchase and maintain insurance on behalf of any person who is or was a Director, or Officer of the Association against any liability asserted against such person and incurred by such person in any such capacity, or arising out of his or her status as such, whether or not the Association would have the power to indemnify such person against such liability under the provisions of this Article.

 

Section 6. The invalidity or non enforceability of any provision in this Article shall not affect the validity or enforceability of the remaining provisions of this Article.