Section 26. Payment of indemnification other than by court award

(a) A
  person who has been successful, on  the  merits  or  otherwise,  in  the
  defense  of  a  civil  or criminal action or proceeding of the character
  described in section twenty-five shall be entitled to indemnification as
  authorized in such section.
    (b) Except as  provided  in  subdivision  (a)  of  this  section,  any
  indemnification  under  section twenty-five of this article or otherwise
  permitted by section twenty-four of this article, unless  ordered  by  a
  court  under  section twenty-seven of this article, shall be made by the
  cooperative only if authorized in the specific case:
    (1) by the board acting by a quorum consisting of  directors  who  are
  not  parties  to  such  action  or  proceeding  upon  a finding that the
  director or officer has met the standard of conduct set forth in section
  twenty-five  of  this  article  or  established  pursuant   to   section
  twenty-four of this article, as the case may be, or,
    (2)  if  a  quorum  under  paragraph  one  of  this subdivision is not
  obtainable or, even if obtainable, a quorum of  disinterested  directors
  so directs:
    (i)  By  the  board  upon  the opinion in writing of independent legal
  counsel that indemnification is proper in the circumstances because  the
  applicable  standard  of conduct set forth in such sections has been met
  by such director or officer, or
    (ii) By the members upon a finding that the director  or  officer  has
  met the applicable standard of conduct set forth in such sections.
    (c)  Expenses  incurred  in  defending  a  civil or criminal action or
  proceeding may be paid by  the  cooperative  in  advance  of  the  final
  disposition  of such action or proceeding upon receipt of an undertaking
  by or on behalf of such director or officer to repay such amount as, and
  to the extent, required by subdivision (a) of  section  twenty-eight  of
  this article.