SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCIES

PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS June 30, 2004 and 2003, and April 30, 2003 Expressed in millions of Rupiah, unless otherwise stated 154

60. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCIES

a. Management Contract On April 8, 2000, a Management Contract was signed between the Government and Bank Mandiri in connection with the recapitalization of Bank Mandiri as described in Note 3. The Management Contract provides for, among others, the requirements and milestones to be fulfilled by Bank Mandiri in accordance with its Business Plan for the period to the end of 2001, which include, the following: 1. Obligations to be fulfilled by Bank Mandiri, among others: • To use Government Recapitalization Bonds to settle liabilities only and not for acquiring assets, except for Government Bonds classified as trading based on prevailing regulations. • To reduce overhead costs. • To settle unreconciledopen items and reconcile inter-branch transactions derived from the Merged Banks. • To conduct a special audit of high risk and material un-reconciled open items. • To implement an automated monitoring system over the use of funds and liquidity of Bank Mandiri. • To implement a policy of reporting according to Bank Indonesia regulations. • To take any action as required in respect of the Credit Portfolio to comply with Bank Indonesia’s requirements, especially for the Legal Lending Limit LLL. • To agree to syndicate the current outstanding corporate loans that exceed the Legal Lending Limit and participate in syndication activities to support other banks in resolving Legal Lending Limit problems. • To agree to improve its Net Open Position based on the prevailing regulations and prepare a plan to acquire assets denominated in US Dollars. • To follow the agreement with the Minister of Finance to undertake actions needed to accelerate the privatization process of Bank Mandiri itself by issuing shares to the public. If Bank Mandiri defaults on its commitments as stipulated in the management contract, the consequences are: • Replacement of the Boards of Directors and Commissioners. • Adjustment of the milestones if the reasons for non-achievement are beyond the control of Bank Mandiri. PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS June 30, 2004 and 2003, and April 30, 2003 Expressed in millions of Rupiah, unless otherwise stated 155

60. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCIES