S.B. 147                                                        VETOES

SUBJECT TO § 2A-404 ON SUBSTITUTED PERFORMANCE, THE FOLLOWING
RULES APPLY:

(A)     DELAY IN DELIVERY OR NONDELIVERY IN WHOLE OR IN PART BY A
LESSOR OR A SUPPLIER WHO COMPLIES WITH PARAGRAPHS (B) AND (C) IS NOT A
DEFAULT UNDER THE LEASE CONTRACT IF PERFORMANCE AS AGREED HAS BEEN
MADE IMPRACTICABLE BY THE OCCURRENCE OF A CONTINGENCY THE
NONOCCURRENCE OF WHICH WAS A BASIC ASSUMPTION ON WHICH THE LEASE
CONTRACT WAS MADE OR BY COMPLIANCE IN GOOD FAITH WITH ANY APPLICABLE
FOREIGN OR DOMESTIC GOVERNMENTAL REGULATION OR ORDER, WHETHER Or'
NOT THE REGULATION OR ORDER LATER PROVES TO BE INVALID.

(B)      IF THE CAUSES MENTIONED IN PARAGRAPH (A) AFFECT ONLY PART
OF THE LESSOR'S OR THE SUPPLIER'S CAPACITY TO PERFORM, HE OR SHE SHALL
ALLOCATE PRODUCTION AND DELIVERIES AMONG HIS OR HER CUSTOMERS BUT AT
HIS. OR HER OPTION MAY INCLUDE REGULAR CUSTOMERS NOT THEN UNDER
CONTRACT FOR SALE OR LEASE AS WELL AS HIS OR HER OWN REQUIREMENTS FOR
FURTHER MANUFACTURE. HE OR SHE MAY SO ALLOCATE IN ANY MANNER THAT IS
FAIR AND REASONABLE.

(C)     THE LESSOR SEASONABLY SHALL NOTIFY THE LESSEE AND IN THE
CASE OF A FINANCE LEASE THE SUPPLIER SEASONABLY SHALL NOTIFY THE LESSOR
AND THE LESSEE, IF KNOWN, THAT THERE WILL BE DELAY OR NONDELIVERY AND,
IF ALLOCATION IS REQUIRED UNDER PARAGRAPH (B), OF THE ESTIMATED QUOTA
THUS MADE AVAILABLE FOR THE LESSEE.

2A-406. PROCEDURE ON EXCUSED PERFORMANCE

(1)      IF THE LESSEE RECEIVES NOTIFICATION OF A MATERIAL OR INDEFINITE
DELAY OR AN ALLOCATION JUSTIFIED UNDER § 2A-405, THE LESSEE MAY BY
WRITTEN NOTIFICATION TO THE LESSOR AS TO ANY GOODS INVOLVED, AND WITH
RESPECT TO ALL OF THE GOODS IF UNDER AN INSTALLMENT LEASE CONTRACT THE
VALUE OF THE WHOLE LEASE CONTRACT IS SUBSTANTIALLY IMPAIRED (§ 2A-510):

(A)     TERMINATE THE LEASE CONTRACT (§ 2A-505(2)); OR

(B)      EXCEPT IN A FINANCE LEASE, MODIFY THE LEASE CONTRACT BY
ACCEPTING THE AVAILABLE QUOTA IN SUBSTITUTION, WITH DUE ALLOWANCE
FROM THE RENT PAYABLE FOR THE BALANCE OF THE LEASE TERM FOR THE
DEFICIENCY BUT WITHOUT FURTHER RIGHT AGAINST THE LESSOR.

(2)      IF, AFTER RECEIPT OF A NOTIFICATION FROM THE LESSOR UNDER §
2A-405, THE LESSEE FAILS TO SO MODIFY THE LEASE AGREEMENT WITHIN A
REASONABLE TIME NOT EXCEEDING 30 DAYS, THE LEASE CONTRACT LAPSES WITH
RESPECT TO ANY DELIVERIES AFFECTED.

2A-407. IRREVOCABLE PROMISES: FINANCE LEASES

(1) IN THE CASE OF A FINANCE LEASE THAT IS NOT A CONSUMER LEASE THE
LESSEE'S PROMISES UNDER THE LEASE CONTRACT BECOME IRREVOCABLE AND
INDEPENDENT UPON THE LESSEE'S ACCEPTANCE OF THE GOODS.

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