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SECTION 3. CONFLICT OF INTEREST AVOIDANCE PRODEDURES <br />a. Duty to Disclose. <br />In connection with any actual or possible conflict of interest, an interested person must <br />disclose the existence of the financial interest and be given the opportunity to disclose <br />all material facts to the Directors and members of committees with governing Board <br />delegated powers considering the proposed transaction or arrangement. <br />b. Determining Whether a Conflict of Interest Exists. <br />After disclosure of the financial interest and all material facts, and after any <br />discussion with the interested person, he/she shall leave the governing Board or <br />committee meeting while the determination of a conflict of interest is discussed and <br />voted upon. The remaining Board or committee members shall decide if a conflict of <br />interest exists. <br />c. Procedures for Addressing the Conflict of Interest. <br />An interested person may make a presentation at the governing Board or <br />committee meeting, but after the presentation, he/she shall leave the meeting during <br />the discussion of, and the vote on, the transaction or arrangement involving the <br />possible conflict of interest. <br />The chairperson of the governing Board or committee shall, if appropriate, <br />appoint a disinterested person or committee to investigate alternatives to the <br />proposed transaction or arrangement. <br />After exercising due diligence, the governing Board or committee shall determine <br />whether the corporation can obtain with reasonable efforts a more advantageous <br />transaction or arrangement from a person or entity that would not give rise to a <br />conflict of interest. <br />If a more advantageous transaction or arrangement is not reasonably possible under <br />circumstances not producing a conflict of interest, the governing Board or <br />committee shall determine by a majority vote of the disinterested Directors <br />whether the transaction or arrangement is in the corporation's best interest, for its <br />own benefit, and whether it is fair and reasonable. In conformity with the above <br />determination, it shall make its decision as to whether to enter into the transaction or <br />arrangement. <br />San Leandro Improvement Association Bylaws 23 October 2013 <br />