Section 1

Subject to the laws of the State of New York, every Director and every officer of the Association and the Manager (as defined by Section 2 of this Article) shall be indemnified by the Association against, and it shall be the duty of the Directors to pay out of the funds of the Association, all losses, costs and expenses which any such Director or officer or the Manager may incur or become liable to pay by reason of any contract entered into, or any act or thing done, or in any other way by him, as such Director or officer or Manager, as the case may be, in carrying out his duties as Director or officer or Manager, respectively.