SECTION LEGAL LIABILITY TO PASSENGER :

1. The Underwriters will indemnify the Insured in respect of all sums which the insured shall become legally liable to pay, and shall pay, as compensatory damages (including costs awarded against the insured) in respect of

      a. Accidental bodily injury (fatal or otherwise) to passengers whilst entering, on board, or alighting from the Aircraft and

    B. Loss of or damage to baggage and personal articles of passengers arising out of an accident to the Aircraft Provided Always that

Documentary

Precautions

Effect of Non

Compliance

Employees

and others

Operational

crew

 I. Before a passenger boards the Aircraft the Insured shall take such measures as are necessary to exclude or limit liability for claims under (a) and (b) above to the extent permitted by law

 II. If the measures referred to in proviso (I) above include the issue if a passenger Ticket/Baggage check, the same shall be delivered correctly completed to the passenger a reasonable time before the passenger boards the Aircraft.

     It is further noted and agreed that coverage under this section includes employees, but excluding crew members and workmen’s compensation act/ employer’s liability.

     In the event of failure to comply with proviso (I) or (II) the limit of indemnity by the Underwriters under this section shall not exceed the amount of the legal liability if any, that would have existed had the proviso been complied with.

Exclusions applicable to this section only

2. The Underwriters shall not be liable for injury or loss sustained by any

  I. Director or employee of the Insured or partner in the insured’s business whilst acting in the course of his employment with or duties for the Insured.

  II. Member of the flight cabin, or other crew whilst engaged in the operation of the Aircraft.

Limits of indemnity applicable to this Section

3. The liability of the Underwriters under this Section shall not exceed the amount stated in the schedule. The Underwriters will defray in addition any legal costs and expenses incurred with their written consent in defending any action which may be brought against the Insured in respect if any claim for compensatory damages covered by this section, but should the amount paid or awarded in settlement of such claim exceed the limit if indemnity them the liability of the Underwriters in respect of such legal costs and expenses shall be limited to such proportion of the said legal costs and expenses as the limit of indemnity bears to the amount paid for compensatory damages.

Illegal Uses

Geographical

Limits

Pilots

Transportation

by other

conveyance

Landing and

Take-off Areas

Contractual

Liability

Number of

Passengers

Non- Contribution

War, Hijacking

and other perils

(AVN-48B)

     SECTION (A) GENERAL EXCLUSIONS APPLICABLE

                                  TO ALL SECTIONS

This policy does not apply :

1. Whilst the Aircraft is being used for any illegal purpose or for any purpose other than those stated in the schedule and as defined in the definitions.

2. Whilst the Aircraft is outside the geographical limits stated in the schedule unless due to force majeure.

3. Whilst the Aircraft is being piloted by any person other than as stated in the schedule except that the Aircraft may be operated on the ground by any person competent for that purpose.

4. Whilst the Aircraft is being transported by any means of conveyance except as the result of an accident giving rise to a claim under section 1 of this policy.

5. Whilst the Aircraft is landing on or taking off or attempting to do so from a place which does not comply with the recommendations laid down by the manufacturer of the Aircraft except as a result of force majeure.

6. To liability assumed or rights waived by the insured under any agreement (other than passenger ticket/baggage check issued under section III hereof) except to the extent that such liability would have attached to the insured in the absence of such agreement.

7. Whilst the total number of passengers being carried in the Aircraft exceeds the declared maximum number if passengers stated in the schedule.

8. To claims which are payable under any other policy or policies except in respect if any excess beyond the amount which would have been payable under such other policy or policies had this insurance not been effected.

9. To claims caused by

  a. War, invasion, acts of foreign enemies, hostilities (whether war be declared or not), civil war, rebellion, revolution, insurrection, martial law, military or usurped power or attempts at usurpation of power.

 b. Any hostile detonation of any weapon of war employing atomic or nuclear fission and / or fusion or other like reaction or radioactive force or matter.

Due Dilligence

Compliance

with Air

Navigation

Orders, etc,

    c. Strikes, riots, civil commotions or labour disturbances.

  d. Any act of one or more persons, whether or not agents of a sovereign power, for political or terrorist purpose and whether the loss or damage resulting therefrom is accidental or intentional.

    e. Any malicious act or act of sabotage.

  f. Confiscation, nationalisation, seizure, restraint, detention, appropriation, requisition for title or use by or under the order of any Government (whether civil military or de facto) or public or local authority.

  g. Hijacking or any unlawful seizure or wrongful exercise of control of the Aircraft or crew in flight (including any attempt at such seizure or control) made by any person or persons on board the Aircraft acting without the consent of the insured.

Furthermore this policy does not cover claims arising whilst the Aircraft is outside the control of the insured by reason of any of the above perils.

The Aircraft shall be deemed to have been restored to the control of insured on the safe return of the Aircraft to the insured at an airfield not excluded by the geographical limits of this policy, and entirely suitable for the operation of the Aircraft (Such safe return shall require that Aircraft be parked with engines shut down and under no duress).

    B. GENERAL CONDITIONS APPLICABLE TO ALL SECTIONS

1. The due observance and fulfillment of the terms, conditions and endorsements of this policy shall be a condition precedent to any liability of the Underwriters to make any payment under this policy.

2. The insured shall at all times use due dilligence and do and concur in doing everything reasonably practicable to avoid or diminish any loss hereon.

3. The Insured shall comply with all air navigation & Airworthiness orders and requirements issued by any competent authority affecting the safe operation of the Aircraft and shall ensure that :

    a. The Aircraft is airworthy at the commencement of each flight.

  b. All log books and other records in connection with the Aircraft which are required by any official regulation in force from time to time shall be kept up to date and shall be produced to the Underwriters or their agents on request.

Claims

Procedure

Subrogation

Variation in

Risk

Cancellation

  c. The employees and agents of the insured comply with such orders and requirements.

4. Immediate notice of any event likely to give rise to a claim under this policy shall be given as stated in the schedule. In all cases the insured shall :

  a. Furnish full particulars in writing of such event and forward immediately notice of any claim (by a third party or passenger) with any letters or documents relating thereto.

    b. Give notice of any impending prosecution.

  c. Render such further information and assistance as the Underwriters may reasonably require.

  d. Not act in any way to the detriment or prejudice of the interest of the Underwriters.

  The Insured shall not make any admission of liability or payment or offer or promise of payment without the written consent of the Underwriters.

5. The Underwriters shall be entitled (If they so elect) at any time and for so long as they desire to take absolute control of all negotiations and proceedings and in the name of the Insured to settle, defend or pursue any claim.

6. Upon an indemnity being given or a payment being made by the Underwriters under this policy, they shall be subrogated to the rights and remedies of the Insured who shall Co-Operate with and do all things necessary to assist the Underwriters to exercise such rights and remedies.

7. Should there be any change in the circumstances or nature of the risks which are the basis of this contract the insured shall give immediate notice thereof to the Underwriters and no claim arising subsequent to such change shall be recoverable hereunder unless such change has been accepted by the Underwriters.

8. This policy may be cancelled by either the Underwriters or the insured giving 10 days notice in writing if such cancellation. If cancelled by the Underwriters, they will return a pro rata portion of the premium in respect of the unexpired period of the policy. If cancelled by the insured a return of premium shall be at the discretion of the Underwriters. There will be no

Assignment

Non Marine

Insurance

Arbitration

Two or More

Aircraft

Limits of

Indemnity

False and

Fraudulent

Claims

   return of premium in respect of any Aircraft on which a loss is paid or is payable under this policy.

9. This policy shall not be assigned in whole or part except with the consent of the Underwriters verified by endorsement hereon.

10. This policy is not and the parties hereto expressly agree that it shall not be construed as a policy of marine insurance.

11. This policy shall be construed in accordance with Iranian law and any dispute or difference between the insured and the Underwriters shall be submitted to arbitration in Iran in accordance with the statutory provision for arbitration for the time being in force.

12. When two or more Aircraft are insured hereunder the terms of this policy apply separately to each.

13. Not withstanding the inclusion herein of more than one insured whether by endorsement of otherwise the total liability of the Underwriters in respect of any or all insureds shall not exceed the limit (5) of indemnity stated in this policy.

14. If the insured shall make any claim knowing the same to be false or fraudulent as regards amount or otherwise this policy shall become void and all claims hereunder shall be forfeited.

                                (C) DEFINITIONS

   a. : ACCIDENT ” means any one accident or series of accidents arising out of one event.

  b. “UNIT” means a part or an assembly of parts (including any sub-assemblies) of the Aircraft which has been assigned an Overhaul life as a part or an assembly. Nevertheless, an engine complete with all parts normally attached when removed for the purpose of overhaul or replacement, shall together constitute a single unit.

   c. “OVERHAUL LIFE” means the amount of use, or operational and/or calendar time which, according to the Airworthiness authority. determines when overhaul or replacement of a unit is required.

   d. “OVERHAUL COST” means the costs of labour and materials which are or would be incurred in overhaul or replacement (whichever is necessary) at -

   the end of the overhaul life of the damages or a similar unit.

  e. “PRIVATE PLEASURE” means use for private and pleasure purposes but not use for any business or profession nor for hire or reward.

  f. ”BUSINESS” means the uses stated in private pleasure and use for the purpose of the Insured’s business or profession but not use for hire or reward.

  g. “COMMERCIAL” means the uses stated in private pleasure and business and use for the carriage by the insured of passengers, baggage accompanying passengers and cargo for hire or reward.

   h. “RENTAL” means rental, lease, charter or hire by the insured to any person, company or organization for private pleasure and business uses only, where the operation of the Aircraft is not under the control of the insured. Rental for any other purpose in NOT insured under this policy unless specifically declared to Underwriters under SPECIAL RENTAL USES in the schedule.

   I. Definitions (e), (f), (g) and (h) constitute standard uses and do not include Instruction, Acrobatics, Hunting, Patrol, Fire Fighting, the international dropping, spraying or release of anything, any form of experimental or competitive flying, and any other use involving abnormal hazard, but when cover is provided details of such use (s) are stated in the schedule under SPECIAL USES.

   j. “FLIGHT” means from the time the Aircraft moves forward in taking off or attempting to take off, whilst in the air, and until the Aircraft completes its landing run.

   k. “TAXYING” means movement of the Aircraft under its own power other than in flight as defined. Taxying shall not be deemed to case merely by reason of a temporary halting of the Aircraft.

   l. “MOORED” MEANS, in the case of Aircraft designed to land on water, whilst the Aircraft is afloat and is not in flight or taxying as defined, and includes the risks of launching and hauling up.

  m. “GROUND” means while the Aircraft is not in flight or taxying or moored as defined.