(a) A conflict of interest transaction is a transaction with the cooperative in which a director, officer or non-director member of a special litigation committee of the cooperative has a direct or indirect interest. A conflict of interest transaction is not voidable by the cooperative solely because of the director's or officer's interest in the transaction if any one (1) of the following is true:

(1) The material facts of the transaction and the director's or officer's interest were disclosed or known to the board of directors or a committee of the board of directors and the board of directors or committee authorized, approved, or ratified the transaction;

(2) The material facts of the transaction and director's or officer's interest were disclosed or known to the members entitled to vote and they authorized, approved, or ratified the transaction;

(3) The transaction was fair to the cooperative;

(4) The transaction was of a nature in which the conflict of interest is waived by the articles or bylaws. The waiver shall be upheld unless manifestly unreasonable under the circumstances.

(b) For purposes of this section, a director or officer of the cooperative has an indirect interest in a transaction, if, but not only if:

(1) Another entity in which the director or officer has material financial indirect interest or in which the director or officer is a general partner is party to the transaction; or

(2) Another entity of which the director or officer is a governor, director, manager, officer or trustee is a party to the transaction and the transaction is or should be considered by the board of directors of the cooperative.

(c) For purposes of subdivision (a)(1), a conflict of interest transaction is authorized, approved, or ratified, if it receives the affirmative vote of a majority of the directors on the board of directors, or on the committee, who have no direct or indirect interest in the transaction, but a transaction may not be authorized, approved, or ratified under this section by a single director. If a majority of the directors who have no direct or indirect interest in the transaction vote to authorize, approve, or ratify the transaction, a quorum must be present for the purpose of taking action under this section. The presence of, or a vote cast by, a director with a direct or indirect interest in the transaction does not affect the validity of any action taken under subdivision (a)(1), if the transaction is otherwise authorized, approved, or ratified as provided in subdivision (a)(1).

(d) For purposes of subdivision (a)(2), a conflict of interest transaction is authorized, approved, or ratified if it receives the vote of a majority of the membership interests entitled to be counted under this subsection (d). Membership interests owned by or voted under the control of a director or officer who has a direct or indirect interest in the transaction, and membership interests owned by or voted under the control of an entity described in subdivision (b)(1), may not be counted in a vote of members to determine whether to authorize, approve or ratify a conflict of interest transaction under subdivision (a)(2). The vote of those membership interests, however, shall be counted in determining whether the transaction is approved under other provisions of this chapter. A majority of the membership interests, whether or not present, that are entitled to be counted in a vote on the transaction under this subsection (d) constitutes a quorum for the purpose of taking action under this section.