N.Y. REL Law § 26

§ 26. Payment of indemnification other than by court award. (a) A\nperson who has been successful, on the merits or otherwise, in the\ndefense of a civil or criminal action or proceeding of the character\ndescribed in section twenty-five shall be entitled to indemnification as\nauthorized in such section.\n (b) Except as provided in subdivision (a) of this section, any\nindemnification under section twenty-five of this article or otherwise\npermitted by section twenty-four of this article, unless ordered by a\ncourt under section twenty-seven of this article, shall be made by the\ncooperative only if authorized in the specific case:\n (1) by the board acting by a quorum consisting of directors who are\nnot parties to such action or proceeding upon a finding that the\ndirector or officer has met the standard of conduct set forth in section\ntwenty-five of this article or established pursuant to section\ntwenty-four of this article, as the case may be, or,\n (2) if a quorum under paragraph one of this subdivision is not\nobtainable or, even if obtainable, a quorum of disinterested directors\nso directs:\n (i) By the board upon the opinion in writing of independent legal\ncounsel that indemnification is proper in the circumstances because the\napplicable standard of conduct set forth in such sections has been met\nby such director or officer, or\n (ii) By the members upon a finding that the director or officer has\nmet the applicable standard of conduct set forth in such sections.\n (c) Expenses incurred in defending a civil or criminal action or\nproceeding may be paid by the cooperative in advance of the final\ndisposition of such action or proceeding upon receipt of an undertaking\nby or on behalf of such director or officer to repay such amount as, and\nto the extent, required by subdivision (a) of section twenty-eight of\nthis article.\n