III, NEITHER THE GUARANTOR NOR ANY OF ITS
SUBSIDIARIES IS IN DEFAULT UNDER OR WITH RESPECT TO ANY AGREEMENT, INSTRUMENT OR
UNDERTAKING TO WHICH IT IS A PARTY OR BY WHICH IT IS BOUND IN ANY RESPECT WHICH
COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT. NO SERIES 2002-1
EARLY AMORTIZATION EVENT, POTENTIAL SERIES 2002-1 EARLY AMORTIZATION EVENT,
EVENT OF DEFAULT OR DEFAULT HAS OCCURRED AND IS CONTINUING.
(J)
TAXES. UNDER THE LAWS OF BERMUDA, THE
EXECUTION, DELIVERY AND PERFORMANCE BY THE GUARANTOR OF THIS GUARANTY AND BY IT
AND EACH OF ITS SUBSIDIARIES OF THE OTHER LOAN DOCUMENTS AND TRANSACTION
DOCUMENTS TO WHICH THEY ARE A PARTY AND ALL PAYMENTS OF PRINCIPAL, INTEREST,
FEES AND OTHER AMOUNTS HEREUNDER AND THEREUNDER ARE EXEMPT FROM ALL INCOME OR
WITHHOLDING TAXES, STAMP TAXES, CHARGES OR CONTRIBUTIONS OF BERMUDA OR ANY
POLITICAL SUBDIVISION OR TAXING AUTHORITY THEREOF, IRRESPECTIVE OF THE FACT THAT
THE ADMINISTRATIVE AGENT OR ANY OF THE LENDERS MAY HAVE A REPRESENTATIVE OFFICE
OR SUBSIDIARY IN BERMUDA. THE GUARANTOR IS VALIDLY OBLIGATED TO MAKE ALL
PAYMENTS DUE UNDER THIS GUARANTY AND EACH OF ITS SUBSIDIARIES IS VALIDLY
OBLIGATED TO MAKE ALL PAYMENTS DUE UNDER THE OTHER LOAN DOCUMENTS AND
TRANSACTION DOCUMENTS FREE AND CLEAR OF ANY SUCH TAX, WITHHOLDING OR CHARGE SO
THAT THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL RECEIVE THE AMOUNTS DUE AS
IF NO SUCH TAX, WITHHOLDING OR CHARGE HAD BEEN IMPOSED.
(K)
PARI PASSU STATUS. THE OBLIGATIONS OF THE
GUARANTOR HEREUNDER CONSTITUTE DIRECT, GENERAL OBLIGATIONS OF THE GUARANTOR AND
RANK AT LEAST PARI PASSU (IN PRIORITY OF PAYMENT) WITH ALL OTHER UNSECURED,
UNSUBORDINATED OBLIGATIONS OF THE GUARANTOR RESULTING FROM ANY INDEBTEDNESS FOR
BORROWED MONEY OR GUARANTEE.
(L)
PURPOSE OF ADVANCES. THE PROCEEDS OF THE
LOANS UNDER THE CREDIT AGREEMENT SHALL BE USED BY BLFC SOLELY TO MAKE ADVANCES
UNDER THE SERIES 2002-1 VFC.
(M)
INFORMATION. ALL INFORMATION (INCLUDING, WITH
RESPECT TO THE GUARANTOR, WITHOUT LIMITATION, THE FINANCIAL STATEMENTS REQUIRED
TO BE DELIVERED PURSUANT HERETO), WHICH HAS BEEN MADE AVAILABLE TO THE
ADMINISTRATIVE AGENT OR ANY LENDER BY OR ON BEHALF OF THE GUARANTOR IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY AND THE OTHER LOAN
DOCUMENTS AND TRANSACTION DOCUMENTS IS COMPLETE AND CORRECT IN ALL MATERIAL
RESPECTS AND DOES NOT CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO
STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED
THEREIN NOT MATERIALLY MISLEADING IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH SUCH
STATEMENTS WERE MADE.
(N)
DESIGNATED OBLIGORS. ON THE DATE HEREOF, BL
DIRECTLY OR INDIRECTLY OWNS THE PERCENTAGE OF THE VOTING STOCK OF EACH
DESIGNATED OBLIGOR (OTHER THAN BL) SET FORTH ON SCHEDULE IV HERETO.
7
(O)
RESTRICTIONS ON DESIGNATED OBLIGORS. THERE
IS NO LEGAL OR REGULATORY RESTRICTION ON THE ABILITY OF ANY DESIGNATED OBLIGOR
TO PAY DIVIDENDS TO THE GUARANTOR OUT OF EARNINGS AT SUCH TIMES AS SUCH
DESIGNATED OBLIGOR IS NOT DEEMED TO BE INSOLVENT PURSUANT TO THE LAWS OF ITS
JURISDICTION OF INCORPORATION NOR ANY LEGAL OR REGULATORY