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22 <br /> indemnification by any such person the Association shall promptly cause such determination to be <br /> made (i)by the Board of Directors by majority vote of a quorum consisting of directors not at the <br /> time parties to the proceeding; (ii)if a quorum cannot be obtained,by majority vote of a committee <br /> duly designated by the Board of Directors (in which designation directors who are parties may <br /> participate),consisting solely of two or more directors not at the time parties to the proceeding; (iii) <br /> by special legal counsel selected by the Board of Directors or its committee in the manner prescribed <br /> in(i)or(ii),or if a quorum of the Board of Directors cannot be obtained under(i),and a committee <br /> cannot be designated under(ii), selected by majority vote of the full Board of Directors (in which <br /> selection directors who are parties may participate); or(iv)by the Members,but Members who are <br /> also directors who are at the time parties to the proceeding may not vote on the determination. <br /> As a condition to any such right of indemnification, the Association may require that it be <br /> permitted to participate in the defense of any such action or proceeding through legal counsel <br /> designated by the Association and at the expense of the Association. <br /> The Association may purchase and maintain insurance on behalf of any such persons whether <br /> or not the Association would have the power to indemnify such officers and directors against any <br /> liability under the laws of the State of North Carolina. If any expenses or other amounts are paid by <br /> way of indemnification,other than by court order,action by the Members or by an insurance carrier, <br /> the Association shall provide notice of such payment to the Members in accordance with the <br /> provisions of the laws of the State of North Carolina. <br /> —10— <br />