AGREEMENT FOR THE SALE AND PURCHASE OF 1,377,525,000 SHARES IN PT HANJAYA MANDALA SAMPOERNA

1.  

Commencement of negotiations announcement

2.  

Escrow Agreement

(1)  

DUBUIS HOLDING LIMITED , a company originally incorporated in Mauritius and now continued and incorporated in the Seychelles as a Seychelles company and having a registered office at Suites 25 and 27 Second Floor, Oliaji Trade Centre, Francis Rachel Street, P.O. Box 1312, Victoria, Mahé, Seychelles (the “ Seller ”); and

(2)  

PT PHILIP MORRIS INDONESIA , a limited liability company established under the laws of the Republic of Indonesia, domiciled in Jakarta, having its registered office at Wisma GKBI, Suite 1801, JL. Jend. Sudirman No. 28, Jakarta 10210, Indonesia a company incorporated in Indonesia (the “ Buyer ”).

(A)  

The Seller is the holder of 1,377,525,000 fully-paid ordinary shares of Rupiah 100 each of the Company representing 31.43% of the issued share capital of the Company (the “ Shares ”).

(B)  

The Seller wishes to sell and the Buyer wishes to buy the Shares on the terms and conditions set out in this Agreement.

1.  

SALE AND PURCHASE

1.1  

The Seller agrees to sell, and the Buyer agrees to buy, the Shares and each right attaching to the Shares at or after the date of this Agreement, free of any Encumbrance.

1.2  

The Seller waives all rights of pre-emption and other restrictions on transfer over the Shares conferred on it. The Seller shall procure that all such rights conferred on any other person are waived no later than Completion so as to permit the sale and purchase of the Shares.

2.  

DOCUMENTS TO BE DELIVERED BY THE PARTIES

2.1  

On the date of this Agreement the Seller shall deliver to the Buyer an opinion from Simon Mitchell, Seychelles Attorney-at-Law (as to Seychelles law), in form and substance satisfactory to the Buyer, dated the date of this Agreement, opining that the Seller is duly authorised to execute this Agreement.

2.2  

On the date of this Agreement the Buyer shall deliver to the Seller an opinion from Mochtar, Karuwin & Komar (as to Indonesian law), in form and substance satisfactory to the Seller, dated the date of this Agreement, opinining that the Buyer is duly authorised to execute this Agreement.

3.  

CONDITIONS TO COMPLETION

3.1  

Completion is conditional on the following conditions being satisfied or waived by the Buyer under clause 3.3:

3.1.1  

none of the Seller Warranties being untrue, inaccurate or misleading and there not having occurred any fact or circumstance which would result or which would cause a Seller Warranty to be untrue, inaccurate or misleading when given in respect of the facts or circumstances as at Completion; and

3.1.2  

the Seller having complied with clause 7.1.

3.2  

If the Seller becomes aware of a fact or circumstance that might prevent a Condition being satisfied, it shall immediately inform the Buyer.

3.3  

At any time prior to Completion the Buyer may waive a Condition on any terms it decides by notice to the Seller.

3.4  

Completion is also conditional on the Buyer having deposited in immediately available funds the Initial Payment with the Escrow Agent on the terms of the Escrow Agreement. If the Buyer becomes aware of a fact or circumstance that might prevent the condition in this clause 3.4 being satisfied, it shall immediately inform the Seller. At any time prior to Completion the Seller may waive this condition by notice in writing to the Buyer. As soon as practicable following signature of this Agreement, the parties shall appoint the Escrow Agent and enter into the Escrow Agreement with such amendments as the parties may agree (acting reasonably).

4.  

COMPLETION

4.1  

Completion shall take place at the offices of Mochtar, Karuwin & Komar at 9.00 a.m. on the Completion Date.

4.2  

At Completion:

4.2.1  

the Buyer will provide the Seller with evidence, in a form reasonably satisfactory to the Seller, that it has satisfied the condition in clause 3.4;

4.2.2  

the Seller shall do all the things required of it in schedule 2;

4.2.3  

The Seller will provide the Buyer with evidence, in a form reasonably satisfactory to the Buyer, that the Seller’s broker/custodian owns the Shares free of all liens and the Shares are available for transfer, and the Seller’s broker shall enter an instruction to transfer/sell the Shares to the Buyer on the Negotiated Market of the Jakarta Stock Exchange, and upon notification of the transfer/sale of an additional 375,675,000 shares of the Company (the “ Additional Shares ”), the Buyer’s broker will enter an instruction to transfer/purchase the Shares from the Seller on the Negotiated Market of the Jakarta Stock Exchange, and the Seller’s broker and the Buyer’s broker shall mutually confirm that such transfers have been crossed in the Negotiated Market.

4.2.4  

Subject to the Seller and the Buyer having complied with clause 4.2.3, and subject to the Buyer having received evidence in a form reasonably satisfactory to the Buyer that the Shares and the Additional Shares have been crossed on the exchange through the Negotiated Market in favour of the Buyer, the Seller shall instruct its custodian to instruct the Clearing Agency to execute, on the same day, the book entry settlement of the transfer of the Shares to the Buyer’s

broker’s account, in favour of the Buyer, through a delivery free of payment method. The Buyer, on receipt of evidence through the C Best system that there are instructions pending to transfer the Shares and the Additional Shares to the Buyer’s account, shall instruct its custodian to issue an instruction to the Clearing Agency to execute a book entry settlement to receive the Shares from the securities account of the Seller by way of a receive free of payment method.

4.2.5  

On the earlier of (a) receipt of confirmation in the form set out in Annexure 1 to the Escrow Agreement signed by or on behalf of the Buyer; and (b) receipt of a notice signed by or on behalf of Seller’s Custodian(s) confirming that an aggregate of 1,753,200,000 shares in the Company have been transferred from the Clearing Agency account of Seller’s Custodian(s) to the Clearing Agency account of Buyer’s Custodian and attaching a certified copy of a letter from the Clearing Agency confirming that such transfer(s) has occurred, the Escrow Agent shall release and pay (and the Buyer shall instruct the Escrow Agent to release and pay) the Initial Payment to the Seller in accordance with paragraph 3 of the Escrow Agreement on account of the Purchase Price. Release and payment of the Initial Payment to the Seller shall be good, valid and effectual discharge of the Buyer’s obligations under this clause 4.2.5. The balance of the Purchase Price after deducting the Initial Payment shall be paid by the Buyer in accordance with clause 8.

4.3  

The Buyer:

4.3.1  

is not obliged to complete this Agreement unless the Seller complies with its obligations under clause 4.2; and

4.3.2  

is not entitled or obliged to complete this Agreement unless the Buyer simultaneously completes the acquisition of that number of fully paid ordinary shares of Rupiah 100 each of the Company which (together with the Shares) represent not less than 40 per cent. of the issued share capital of the Company.

4.4  

The Seller is not obliged to complete this Agreement unless the Buyer complies with its obligations under clause 4.2.5.

4.5  

If Completion does not take place on the Completion Date because a party (the “ Defaulting Party ”) fails to comply with any of its obligations under clause 4.2, then the other party (the “ Second Party ”) may by notice to the Defaulting Party:

4.5.1  

postpone Completion to a date not more than 20 Business Days after the Completion Date. If the Second Party postpones Completion to another date in accordance with this clause 4.5.1, then the provisions of this Agreement apply as if that other date is the Completion Date; or

4.5.2  

terminate this Agreement with immediate effect. If the Second Party terminates this Agreement under this clause 4.5.2, then each party’s further rights and obligations under this Agreement cease immediately, but termination does not affect a party’s accrued rights and obligations under this Agreement at the time of termination.

5.  

SELLER WARRANTIES

5.1  

The Seller warrants to the Buyer that each Seller Warranty is true, accurate and not misleading at the date of this Agreement.

5.2  

Immediately before Completion, the Seller is deemed to warrant to the Buyer that each Seller Warranty is true, accurate and not misleading by reference to the facts and circumstances as at Completion.

5.3  

Each Seller Warranty is to be construed independently and (except where this Agreement provides otherwise) is not limited by a provision of this Agreement or another Seller Warranty.

6.  

BUYER WARRANTIES

6.1  

The Buyer warrants to the Seller that each Buyer Warranty is true, accurate and not misleading at the date of this Agreement.

6.2  

Immediately before Completion, the Buyer is deemed to warrant to the Seller that each Buyer Warranty is true, accurate and not misleading by reference to the facts and circumstances as at Completion.

6.3  

Each Buyer Warranty is to be construed independently and (except where this Agreement provides otherwise) is not limited by a provision of this Agreement or another Buyer Warranty.

7.  

FURTHER UNDERTAKINGS

7.1  

The Seller shall procure that an extraordinary general meeting of the shareholders of the Company is called for the purposes only of considering resolutions (in a form reasonably satisfactory to the Buyer) to appoint the Buyer’s nominees to the Board of Directors and the Board of Commissioners, such meeting to be held on the date (being not later than 60 days after Completion) which is notified to the Seller by the Buyer at least two Business Days before Completion.

7.2  

The Buyer agrees that it shall procure that members of the Board of Directors and the Board of Commissioners who are replaced by the Buyer’s nominees at the meeting called in accordance with clause 7.1 (or at any other meeting of shareholders called for that purpose) shall be released and discharged ( acquit et décharge ) of all their duties and liabilities as directors or commissioners (as the case may be) of the Company as of and for the period up to and including the EGM Date.

7.3  

Without the prior written consent of the Buyer (such consent not to be unreasonably withheld or delayed), the Seller agrees that it shall not, in its capacity as a shareholder of the Company, do any of the things specified in schedule 4 at any time prior to Completion.

7.4  

The Seller shall notify the Buyer as soon as reasonably practicable if, to its knowledge, there is a Consultation Event prior to Completion and, to the extent it is able as a shareholder of the Company, it shall (i) cooperate with any reasonable request made by the Buyer and shall use its reasonable endeavours to procure that persons nominated by

the Buyer are provided with reasonable access to the Board of Directors and the Board of Commissioners and that (subject to their fiduciary duties and any obligations of confidentiality applicable to them or to the Company) the Board of Directors and the Board of Commissioners shall consult with such persons and provide them with such information which they may reasonably request in connection with the Consultation Event, its effect on the Target Group and/or the steps being taken to alleviate or remedy the Consultation Event.

7.5  

Other than in accordance with its obligations under this Agreement, the Seller will not offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, or announce an offer of, any Shares (or any interest therein or in respect thereof) or enter into any transaction with the same economic effect as any of the foregoing.

8.  

PAYMENT OF THE BALANCE OF THE PURCHASE PRICE

The Buyer shall pay the Deferred Payment by wire transfer in immediately available funds to the Seller’s Bank Account on the date which is 60 days after the Completion Date (provided that if this is not a Business Day, payment shall be made on the next following Business Day). Such payment of the Deferred Payment into the Seller’s Bank Account shall be good, valid and effectual discharge of the Buyer’s obligations under this clause 8.

9.  

CONDUCT IN CONNECTION WITH THE TENDER OFFER

9.1  

The Buyer agrees that it shall:

9.1.1  

deliver a letter to the Board of Directors and the Board of Commissioners of the Company during the course of the morning (Jakarta time) on 13 March 2005 notifying them of its intentions in relation to the Company following the closing of the Tender Offer;

9.1.2  

issue an announcement of the commencement of negotiations in the agreed form.

9.2  

Conditional on Completion, the Buyer agrees that it shall:

9.2.1  

submit a plan in relation to the Tender Offer to Bapepam within two Business Days after the Completion Date;

9.2.2  

proceed with the Tender Offer in accordance with applicable Indonesian law; and

9.2.3  

not increase the price per share (in Rupiah) payable under the Tender Offer above Rupiah 10,600 per Share paid to the Seller under this Agreement.

10.  

LIMITATION OF LIABILITY

10.1  

The Seller shall not be liable under this Agreement:

10.1.1  

in respect of any claim relating to a breach of Seller Warranties set out in paragraphs 1 to 6 of schedule 3, to the extent that the aggregate amount of the liability of the Seller would exceed an amount equal to the Purchase Price;

10.1.2  

in respect of any claim (other than a claim referred to in clause 10.1.1):

(a)  

unless the aggregate amount of all such other claims for which the Seller would otherwise be liable under this Agreement exceeds US$20 million; and

(b)  

to the extent that the aggregate amount of the liability of the Seller for all claims made under this Agreement would (but for this clause 10.1.2) exceed an amount equal to US$400 million.

10.2  

None of the Buyer or any of its Affiliates shall be entitled to recover from the Seller under this Agreement more than once in respect of the same loss, damage or other liability suffered or incurred.

11.  

CONFIDENTIAL INFORMATION

11.1  

The Seller undertakes to the Buyer, for itself and, after Completion, on behalf of each member of the Target Group, that after Completion the Seller shall, and shall procure that its Affiliates shall:

11.1.1  

not use or disclose to any person any Target Group Confidential Information or any Buyer Confidential Information it (or its Affiliates) has or acquires; and

11.1.2  

make every effort to prevent the use or disclosure of any Target Group Confidential Information or any Buyer Confidential Information it (or its Affiliates) has or acquires.

11.2  

The Buyer undertakes to the Seller, for itself and on behalf of its Affiliates, the Buyer shall and shall procure that its Affiliates shall:

11.2.1  

not use or disclose to any person any Seller Confidential Information it (or its Affiliates) has or acquiries; and

11.2.2  

make every effort to prevent the use or disclosure of Seller Confidential Information.

11.3  

Clauses 11.1 and 11.2 do not apply to disclosure of Target Group Confidential Information or of Buyer Confidential Information by the Seller or its Affiliates or a disclosure of Seller Confidential Information by the Buyer or its Affiliates (as the case may be):

11.3.1  

to the extent required to be disclosed by law or by a rule of any Relevant Authority, whether or not the requirement has the force of law, provided that (so far as is reasonably practicable) the disclosure shall only be made:

(a)  

in the case of a disclosure of Target Group Confidential Information prior to Completion or of Buyer Confidential Information by the Seller or any of its Affiliates after promptly notifying the Buyer in advance of such requirement, consulting with the Buyer on the advisability of such disclosure and on taking steps to narrow or minimise such disclosure, permitting the Buyer to meet with and make representations to the

Relevant Authority and, if disclosure is still required by the Relevant Authority, after taking into account the Buyer’s reasonable requirements as to its timing, content and manner of making or despatch; or

(b)  

in the case of a disclosure of Seller Confidential Information by the Buyer or any of its Affiliates, to the extent reasonably practicable after promptly notifying the Seller in advance of such requirement, consulting with the Seller on the advisability of such disclosure and on taking steps to narrow or minimise such disclosure, permitting the Seller to meet with and make representations to the Relevant Authority and, if disclosure is still required by the Relevant Authority, after consultation with the Seller and after taking into account the Seller’s reasonable requirements as to its timing, content and manner of making or despatch; or

11.3.2  

to a party’s directors, officers, employees, advisers, agents, Affiliates or representatives of their advisors or agents (“ Representative ”) for the purpose of advising such party in connection with the transactions contemplated by this Agreement or any Dispute provided that such disclosure is essential for these purposes and is on the basis that the party making the disclosure shall be responsible for any breach of this clause 11 by its Representatives as if the Representatives were bound by this clause 11 in the same manner as the party making the disclosure.

11.4  

If it is not reasonably practicable for a party (the “ Disclosing Party ”) to consult with the other party (the “ Information Holder ”) under clause 11.3.1 prior to making a disclosure under that clause, then the Disclosing Party shall, to the extent permitted by law or by the rules of any Relevant Authority, inform the Information Holder of the circumstances, timing, content and manner of making or despatch of the disclosure promptly after such disclosure is made.

11.5  

Subject to the provisions of this clause 11, the Seller shall provide all information available to it and in its possession concerning the Company and the Seller which the Buyer reasonably requests for inclusion in the tender offer statement to be issued in connection with the Tender Offer.

11.6  

This clause 11 will cease to apply on the date three years following the date of this Agreement.

12.  

ANNOUNCEMENTS

12.1  

Subject to clause 12.2, neither party may make or send, and each party shall procure that none of its Affiliates make or send, a public announcement, communication or circular concerning the transactions referred to in this Agreement unless it first obtains the other party’s written consent, which may not be unreasonably withheld or delayed.

12.2  

Without limitation to the parties’ obligations under clause 11, clause 12.1 d