Article X - Indemnification and Insurance

Section 1. The Association shall indemnify any person 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 by reason of the fact that he is or was a representative of the Association, or is or was serving at the request of the Association as a representative of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys fees), judgments, fines and amounts paid in settlement actually or reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interest of the Association, and, with respect to any criminal action or proceedings, had no reasonable cause to believe his 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 reasonably believed to be in, or not opposed to, the best interest of the Association, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

Section 2. Notwithstanding any contrary provision of the Articles of Incorporation or these By-laws, to the extent that a representative of the Association has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 1 above or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys fees) actually and reasonably incurred by him in connection therewith.

Section 3. Unless ordered by a court, any indemnification under Section 1 above shall be made by the Association only as authorized in the specific case upon a determination that indemnification of the representative is proper in the circumstances because he has met the applicable standard of conduct set forth in such Section. Such determination shall be made:

(1) By the Board of Directors by a majority vote of a quorum consisting of directors who are not parties to such action, suit or proceeding;

(2) By independent legal counsel in a written opinion which is authorized

(i) by a majority vote of a quorum consisting of directors who are not parties to such action, suit or proceeding or

(ii) if such quorum is not obtainable, by a majority vote of all of the directors;

(3) By the members.

Section 4. Expenses incurred in defending a civil or criminal action, suit or proceeding, may be paid by the Association in advance of the final disposition of such action, suit or proceeding in the discretion of the Board of Directors in any specific case upon receipt of an undertaking by or on behalf of the representative to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the Association.

Section 5. The Association shall also indemnify any person against any expenses, including attorneys’ fees, actually and reasonably incurred by him in enforcing successfully any right to indemnification under this Article. 

Any person who shall serve as a director, officer, employee or agent of the Association or is or was serving at the request of the Association as a director, officer employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall be deemed to do so with knowledge of and in reliance upon the rights of indemnification provided in this Article.

Section 6. The indemnification provided in this Article shall not be deemed exclusive of any other rights to which a person seeking indemnification may be entitled under any agreement, vote of members or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a representative and shall inure to the benefit of the heirs and personal representative of such person.

Section 7. Any indemnification under this Article by the Association of a representative of the Association shall not apply to expenses or liability incurred by such individuals which are covered by insurance.

Section 8. The Association shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Association, or is or was serving at the request of the association as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, of arising out of his status as such, whether or not the Association would have the power to indemnify him against such liability.

Limitation of Personal Liability

Section 9. A director of the Association shall not be personally liable for monetary damages as such for any action taken, or any failure to take any action, unless

(a) the director has breached or failed to perform the duties of his office under Section 8363 of Title 42 of the Pennsylvania Consolidated Statutes Annotated (relating to the standard of care and justifiable reliance of directors); and

(b) the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness; provided, however, that the provisions of this Section 9 shall not apply to

(i) the responsibility or liability of a director pursuant to any criminal statute, or

(ii) the liability of a director for the payment of taxes pursuant to local, state or federal law.