SAGARMATHA INSURANCE COMPANY LTD

Marine Hull Insurance

Whereas the Insured named in the schedule hereto has made to the SAGARMATHA INSURANCE
CO. LTD. (hereinafter called “the Company”) a written proposal by completing a questionnaire which,
together with any other statements made in writing by the Insured for the purpose of this Policy, is
deemed to be incorporated herein,
Now this Policy of Insurance witnesses that, subject to the Insured having paid to the Company the
premium mentioned in the schedule and subject to the terms, exclusions, provisions and conditions
contained herein or endorsed hereon, the Company will indemnify the Insured in the manner and to the
extent hereinafter provided.

NOW THIS POLICY OF INSURANCE WITNESS

That subject to the terms, exceptions, exclusions, provisions and conditions contained herein or endorsed
hereon, the Company will at its own option by payment or reinstatement or repair indemnify the Insured
against unforeseen and sudden physical damage by any cause not hereinafter excluded to any insured
property specified in the attached Schedule (s) whilst at the location mentioned therein necessitating its
immediate repair or replacement. This Policy shall apply to insured items whether they are at work or at
rest, or when being shifted within the premises. The liability of the Company for any one item of the
Insured property shall not exceed in the aggregate in any one Period of Insurance the Sum Insured set
against such item in the attached Schedule (s). However the Sum Insured under such item can be
reinstated after occurrence of a claim for balance period.

GENERAL CONDITIONS
1. The due observance and fulfilment of the terms of this Policy, in so far as they relate to anything to
be done or complied with by the Insured, and the truth of the statements and answers in the
questionnaire and proposal made by the Insured shall be a condition precedent to any liability of
the Company.

2. The schedule and the sections (s) shall be deemed to be incorporated in and form part of this Policy
and the expression "this Policy”, wherever used in this contract, shall be read as including the
Schedule and the section(s). Any word or expression to which a specific meaning has been
attached in any part of this Policy, of the schedule or of the section(s) shall bear such meaning
wherever it may appear.

3. The Insured shall at his own expense take all reasonable precautions and comply with all reasonable
recommendations of the Company to prevent loss or damage and comply with statutory
requirements and manufacturers’ recommendations.

4 a) Representatives of the Company shall at any reasonable time have the right to inspect and
examine the risk and the Insured shall provide the representatives of the Company with all
details and information necessary for the assessment of the risk.
 b) The Insured shall immediately notify the Company by facsimile and in writing of any
material change in the risk and cause at his own expense such additional precautions to be
taken as circumstances may require to ensure safe operation of the insured items and the
scope of cover and/or premium shall, if necessary, be adjusted accordingly.

No material alteration shall be made or admitted by the insured whereby the risk is increased, the
policy shall be void unless the continuance of the insurance confirmed in writing by the Company.

5. In the event of any occurrence which might give rise to a claim under this Policy, the Insured shall
a) immediately notify the Company by telephone or facsimile as well as in writing, giving an
indication as to the nature and extent of the loss or damage;
b) Take all steps within his power to minimize the extent o the loss or damage;

c) Preserve the parts affected and make them available for inspection by a representative or
surveyor of the Company;
d) furnish all such information and documentary evidence as the Company may require;
e) Inform the police authorities in the case of loss, damage due to burglary.

The Company shall not in any case be liable for loss, damage or liability of which no notice has been
received by the Company within 14 days of its occurrence. Upon notification being given to the
Company under this condition, the Insured may carry out repairs or replacement any minor damage:
in all other cases a representative of the Company shall have the opportunity of inspecting the loss
or damage before any repairs or alterations are effected.
If a representative of the Company does not carry out the inspection within a period of time
which could be considered adequate under the circumstances, the Insured is entitled to proceed
with the repairs or replacement.

The liability of the Company under this policy in respect of any insured item shall cease if said item
is kept in operation after a claim without being repaired to the satisfaction of the Company, or if
temporary repairs are carried out without the Company’s consent.

6. If at the time any claim arises under this Policy there is any other insurance covering the same loss
or damage, the Company shall not be liable to pay or contribute more than their ratable proportion
of any claim for such loss or damage.

7. If a claim is in any respect fraudulent or if any false declaration is made or used in support
thereof or if any fraudulent mean of devices are used by the Insured or any one acting on his
behalf to obtain any benefit under this Policy, if a claim is made and rejected and no action or
suit is commenced within three months after such rejection , all benefits under this Policy shall
be forfeited.

8. No admission, offer, promise, payment or indemnity shall be made or given by or on behalf of

the Insured without the written consent of the Company who shall be entitled if they so desire to
takeover and conduct in the name of the Insured the defense or settlement of any claim for
Indemnity or damage or otherwise and shall have full discretion in the conduct of any proceeding
or in the settlement of any claim and the Insured shall give all such information and assistance as
the Company may require
9. The Insured Ship/vessel Shall be Continuously registered in Nepal, The ship shall not be engaged
in any trade/voyage prohibited by the government of Nepal and shall so far as possible, obey all
orders, directions and recommendation given by or on behalf of the government of Nepal,

Section I : Material Damage

PERILS COVERED
This Insurance covers loss of or damage to the subject-matter insured caused by
1. Perils of the rivers lakes or other navigable waters
2. fire, explosion
3. Violent theft by persons from outside the vessel
4. Jettison of Own Goods
5. Piracy
6. Breakdown of / or accident to nuclear installation or reactors
7. contact with aircraft or similar objects falling therefrom, land conveyance, dock or
harbor equipment or installation
8. Earthquake Volcanic eruption or lightning
9. accidents in loading discharging or shifting catch fuel or stores
10. bursting of boilers breakage of shafts or any latent defect in the hull
11. Personal Crew and Passenger Death or Injury

SISTER SHIP
Should the Vessel hereby insured come into collision with or receive salvage services
from another vessel belonging wholly or in part to the same Owners or under the same
management, the Insured shall have the same rights under this insurance as they would
have were the other vessel entirely the property of Owners not interested in the Vessel
hereby insured; but in such cases the liability for the collision or the amount payable for
the services rendered shall be agreed upon between the Insurance Company and the
Insured.

Personal Crew and Passenger Coverage

The Insurance hereby agree with the Insured, to the extent and in the manner herein
provided, that if the Insured Personal Crews and Passenger sustains Death/Bodily Injury
caused by an Accident, Company will pay to the Insured, according to the Schedule of
Benefits
 Table of Benefit
Section Events Benefit
Within 183 days of accident, if loss occur
through following circumstances
(A) In case of death Insurance policy amount that has been
mentioned in the insurance policy of insured
person.
(B) (i) In case of permanent disability, or Sum insured that has been mentioned in the
(ii) In case of incurable disability to see insurance policy of insured person.
with both eyes, or
(iii) In case of physically disable above
wrists of both hands or knee joints of both
legs, or
(iv) In case of damage above one wrist of
hand or one knee joint of leg and fully
disable to see with one eye.
(C) Medical expenses Necessary as well as actual medical expenses
Up to the limit of Nrs 1,00,000.00

Section II : Liability to third parties

This Clause only to apply when a sum is stated for this purpose in the Schedule to the
policy
1. The Company agree to indemnify the Insured for any sum or sums which the Insured
shall become legally liable to pay and shall pay, by reason of interest in the insured
Vessel and arising out of accidents occurring during the currency of this insurance,
in respect of
a. loss of or damage to any other vessel or property whatsoever
b. loss of life, personal injury or illness, including payments made for life
salvage, caused on or near the Vessel or any other vessel
c. any attempted or actual raising, removal or destruction of the wreck of the
insured Vessel

Exclusion under Section II

Notwithstanding the provision of this clause this insurance does not cover any liability
cost or expenses arising in respect of

a. any direct or indirect payment by the Insured under workmen’s compensation or

employers’ liability acts and any other statutory or common law liability in respect of
accidents to or illness of workmen or any other persons employed in any capacity
whatsoever by the Insured or by any persons to whom the protection of this
insurance is afforded by reason of the provisions of Clause
 b. any liability to or incurred by any person engaged in sport or activity, other than
aquaplaning, while being towed by the vessel or preparing to be towed or after being
towed until safely on board or ashore

Limit of Liability
The liability of the Company under this , in respect of any one accident or series of
accidents arising out of the same event, shall in no case exceed the sum stated for this
purpose in the Schedule to the policy , but when the liability of the Insured has been
contested with the consent in writing of the Company, the Company will also pay a
like proportion of the costs which the Insured shall thereby incur or be compelled to
pay.

EXCEPTIONS :
THE COMPANY SHALL NOT BE LIABLE UNDER THIS POLICY RESPECT OF

a) the Excess stated in the Schedule to be borne by the Insured in any one
occurrence, If more than one item is lost or damaged in one occurrence, the
Insured shall not, however, be called upon to bear more than highest single Excess
applicable to such item;
b) loss or damage due to electrical or mechanical breakdown, failure, breakage or
derangement, freezing or coolant or other fluid, defective lubrication or lack of oil
or coolant, but if as a consequence of such breakdown or derangement an accident
occurs causing external damage, such consequential damage will be
indemnifiable.
c) loss or damage to replaceable parts and attachments; unless loss or damage to
equipment's/machinery is indemnifiable in terms of policy

d) loss or damage occurring whilst any Insured item is undergoing a test of any kind
or is being used in any manner or for any purpose other than that for which it was
designed;
e) War, Invasion, act of foreign enemy, hostilities or war like operations (whether
war be declared or not), Civil War Rebellion Revolution, Insurrection, Mutiny,
Civil Commotion, Military or usurped power, martial law, conspiracy,
confiscation, commandeering a group of malicious persons or persons acting on
behalf of or in connection with any political organization, requisition or
destruction or damage by order of any government de jure or de facto or by any
public, Municipal or Local Authority ;
f) loss or damage directly or indirectly caused by, or arising out of, or a aggravated
by nuclear reaction, unclear radiation or radioactive contamination.
g) loss or damage due to any faults or defects existing at the time of commencement
of this policy within the knowledge of the Insured or his representatives, whether
such faults or defects were known to the Company or not.
h) loss or damage directly or indirectly caused by, or arising out of or aggravated by
the willful negligence of the Insured or his representatives;
i) loss or damage for which the supplier or manufacture is responsible either by law
or under contract ;
j) consequential loss or liability of any kind of description ;

PROVISIONS :
1. SUM INSURED :
It is a requirement of this insurance that the Sum Insured shall be equal to the cost
of replacement of the insured property by new property of the same kind and same
capacity, which shall mean its replacement cost including freight, due and custom
duties, if any, and erection cost.

2. BASIS OF INDEMNITY :
a) In cases where damage to an Insured item can be repaired the Company will pay
expenses necessarily incurred to restore the damaged machine to its condition
immediately prior to the accident/loss plus the cost of dismantling and re-erection
incurred for the purpose of effecting the repairs as well as ordinary freight to and
from a repair-shop and custom duties and owned by the Insured, the company will
pay the cost of materials and wages incurred for the purpose of the repairs plus a
reasonable percentage to cover overhead charges. No deduction shall be made for
depreciation in respect of parts replaced, except those with limited life, but the
value or exceeds the actual value of the machinery insured immediately before the
occurrence of the damage, the settlement shall be made on the basis provided for
in b) below.

b) In case where an insured item is totally destroyed the Company will pay the actual
value of the item immediately before the occurrence of the loss, including cost for
ordinary freight, erection actual value to be calculated by deducting proper
depreciation from the replacement value of the item. The Company will also pay
any normal charges for the dismantling of the machinery destroyed, but the
salvage will be taken into account. The cost of any alteration, improvements or
overhauls shall not be recoverable under this Policy.
The cost of any provisional repairs will be borne by the Company if such repairs
constitute part of the final repairs, and do not increase the total repairs expenses.

If the sum insured is less than the amount required to be insured as per provision I
hereinabove, the Company will pay only in such proportion as the sum insured bears to
the amount required to be insured. Every item if more than one shall be subject to this
condition separately.

The Company will make payments only after being satisfied, by production of the
necessary bills and documents, that the repairs have been effected or replacement have
taken place, as the case may be.

6. OBLIGATIONS OF THE INSURED :

a) The insured shall take all reasonable steps to maintain the insured property
in efficient working order and to ensure that no item is habitually or
intentionally overloaded. The insured shall fully observe the manufacturers'
Instructions for operating. Inspection and overhaul, as well as government
statutory, municipal and all other binding regulations in force concerning
the operation and maintenance of the insured plant and machinery.
b) The Company's official shall at all reasonable times have the right to inspect
and examine any property insured hereunder and the Insured shall provide
the officials of the Company with all details and information necessary for
the assessment of the risks. The Company shall provide the insured with a
copy of inspecting official's report, which shall however be treated as
strictly confidential, both by the insured and the Company.

7. DUTIES FOLLOWING ACCIDENT :

In the event of any occurrence which might give rise to a claim under this Policy the
Insured shall ;

a) Immediately notify the Company by telephone or telegram as well as in

writing, giving an indication as to the nature and extent of loss or damage.

b) take all reasonable steps within his power to minimize the extent of the loss or
damage or liability.

c) Preserve the damaged or defective part and make them available for inspection
by an official or surveyor of the Company.
 d) furnish all such information and documentary evidence as the company may
require.

The Company shall not be liable for any loss or damage of which no notice and
completed claims forms have been received by the Company within fourteen days
of its occurrence.

The liability of the Company under this policy in respect of any item of property
sustaining damage, for which indemnity is provided, shall cease if the said item is
kept in operation without being repaired to the satisfaction of the Company.

8. POSITION AFTER A CLAIM

a) The Insured shall not be entitled to abandon any property to the Company
whether taken possession of by the Company or not.

b) As from the day of the loss the Sum Insured for the remainder of the period
of insurance is reduced by the amount of the compensation. To prevent
under insurance during the remainder of the current period of insurance the
amount insured must be reinstated. The premium will be calculated pro-rata
from the day the repaired item is again put to work. For subsequent periods
of insurance the original indemnity and premium are again in force unless
circumstances justify and alteration.

9. TRANSFER OF INTEREST
This insurance granted by this Policy shall cease to attach to any items described
in the Schedule the interest in which shall pass from the Insured otherwise than by
will or operation of law, unless the consent of the Company for the continuance of
the insurance shall be obtained and signified by endorsement hereon.

The Provision of this clause shall extend to any person navigating or in charge of
the insured vessel with the permission of Insured named in this insurance (other
than a person operating, or employed by the operator of a shipyard, repair yard,
Sales Agency or Similar Organization)
10. TERMINATION OF INSURANCE
This insurance may be terminated at any time at the request of the insured ; in which case the
Company will retain the premium calculated at the customary short period rate for the time the
policy has been in force. This insurance may also at any time be terminated at the option of the
Company, on notice to that effect being given to the insured, in which case the Company shall be
liable to repay on demand a ratable proportion of the premium for the unexpired term from the
date of the cancellation.

Month Percentage of Premium Charged

1 Month 20 %

Up to 3 Month 40 %

Up to 6 Month 70 %

Up to 8 Month 100 %

11. RECOURSE
The Insured shall at the expense of the Company do and concur in doing and permit to be done,
all such acts and things as may be necessary or required by the Company in endorsing any right or
remedies or of obtaining relief or indemnity from parties (other than those insured under this
Policy) to which the Company shall be or would become entitled or subrogated upon their paying
for or making good of any loss or damage under this policy, whether such acts and things shall be
or become necessary or required before at after the Insured's indemnification by the Company.

12. ARBITRATION:
If any difference shall arise as to the quantum to be paid under this Policy, (liability being
otherwise admitted) should be according to the insurance Act 2049

*****
*********