NETCARE/CLINICS - SETTLEMENT ANNOUNCEMENT

NETWORK HEALTHCARE HOLDINGS LIMITED
(REGISTRATION NUMBER 1996/008242/06)
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
("NETCARE")
CLINIC HOLDINGS LIMITED
(REGISTRATION NUMBER 1987/004106/06)
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
("CLINICS")
SETTLEMENT ANNOUNCEMENT
1.INTRODUCTION

THE BOARDS OF DIRECTORS OF NETCARE AND CLINICS, AND BARNEY HURWITZ, JEFFREY
HURWITZ AND THE TRUSTEES OF THE BERCO TRUST ("THE VENDOR GROUP") ALL OF WHOM
WERE PART OF THE ORIGINAL TAKEOVER AGREEMENT ("TAKEOVER AGREEMENT") BETWEEN,
INTER ALIA, NETCARE, CLINICS AND THE VENDOR GROUP, ARE PLEASED TO ANNOUNCE THAT
ALL OF THE LITIGATION PROCEEDINGS BETWEEN NETCARE, CLINICS AND THE VENDOR GROUP
HAVE BEEN SETTLED, SAVE AS STATED IN 3 BELOW.
2.CLAIMS BETWEEN NETCARE AND THE VENDOR GROUP
THE SALIENT SETTLEMENT TERMS ARE AS FOLLOWS:-

2.1. THE VENDOR GROUP HAVE AGREED TO ABANDON THEIR PUT OPTION ACTION AGAINST
NETCARE;

2.2. NETCARE HAS AGREED TO ABANDON ITS PRICE ADJUSTMENT AND WARRANTY CLAIMS
AGAINST THE VENDOR GROUP;

2.3. THE VENDOR GROUP WILL SELL APPROXIMATELY 34,0 MILLION CLINICS SHARES (CUM
CAPITAL DISTRIBUTION) TO NETCARE, OR A SUBSIDIARY NOMINATED BY NETCARE, FOR A
CASH CONSIDERATION OF R61,8 MILLION PLUS THE ISSUE OF 10 MILLION NETCARE SHARES
AT 80 CENTS PER SHARE.

IN ADDITION TO THE ABOVE CLAIMS, CERTAIN CONTINUING OPERATIONAL MATTERS WERE IN
DISPUTE AND CLAIMS WERE ASSERTED BY NETCARE AND ITS SUBSIDIARIES ("THE NETCARE
GROUP") AGAINST THE VENDOR GROUP AND BY THE VENDOR GROUP AGAINST THE NETCARE
GROUP. ALL OF THESE EXTRANEOUS ISSUES BETWEEN THE NETCARE GROUP AND THE VENDOR
GROUP HAVE ALSO BEEN RESOLVED SATISFACTORILY.
3. CLAIMS BY NETCARE AGAINST CLINICS

CERTAIN WARRANTY AND PRICE ADJUSTMENT CLAIMS BY NETCARE AGAINST CLINICS REMAIN
TO BE RESOLVED AND DO NOT FORM PART OF THE SUBJECT MATTER OF THE SETTLEMENT
BETWEEN THE VENDOR GROUP AND THE NETCARE GROUP.

THE FINAL QUANTIFICATION OF THE CLAIM BY NETCARE AGAINST CLINICS IS SUBJECT TO
INDEPENDENT REVIEW. AS PREVIOUSLY REPORTED, THIS CLAIM IS TO BE SETTLED, IN
TERMS OF THE TAKEOVER AGREEMENT, BY THE ISSUE OF ADDITIONAL CLINICS SHARES TO
NETCARE.

AN ANNOUNCEMENT IN THIS REGARD IS EXPECTED EARLY IN THE NEW YEAR.
4.EFFECTS OF THE SETTLEMENT ON NETCARE

IT IS EXPECTED THAT THE CONCLUSION OF ALL OF THE DISPUTES REFERRED TO ABOVE,
INCLUDING THE CLAIMS BY NETCARE AGAINST CLINICS, WILL RESULT IN THE INITIAL
COST TO NETCARE OF R920 MILLION BEING EFFECTIVELY REDUCED TO LESS THAN R800
MILLION.

THE EFFECTS OF THE SETTLEMENT ON THE EARNINGS AND NET ASSET VALUE PER SHARE OF
NETCARE ON A PRO-FORMA BASIS ARE POSITIVE BUT ARE NOT CONSIDERED MATERIAL.
THE SETTLEMENT REFERRED TO ABOVE SATISFACTORILY BRINGS TO AN END THE PROTRACTED
CONFLICTS AND LITIGATION BETWEEN THE PARTIES WHICH WILL HOPEFULLY RESTORE
AMICABLE RELATIONSHIPS FOR THE BENEFIT OF ALL CONCERNED.
JOHANNESBURG
14 DECEMBER 2000
LEGAL ADVISERS
H R LEVIN
BOWMAN GILFILLAN INC.
REG. NO. 98/21409/21
KNOWLES HUSAIN INC.
ATTORNEYS
(REGISTRATION NUMBER 2000/000004/21)
SPONSORING BROKER
MERRILL LYNCH SOUTH AFRICA (PTY) LTD.
MEMBER OF THE JSE SECURITIES EXCHANGE SOUTH AFRICA
REGISTRATION NUMBER 1995/01805/07