Counsel Corporation To Acquire Canadian Operations Of Advocat Inc. - Expands Platform In Canadian Long Term Care Sector.

Business Editors

TORONTO--(BUSINESS WIRE)--June 18, 2001

Counsel Corporation (Nasdaq:CXSN) (TSE:CXS.) today announced that it has signed a letter of intent with Advocat Inc. (OTCBB:AVCA.OB) pursuant to which Counsel is to acquire Diversicare Canada Management Services Co., Inc., Advocat's Canadian subsidiary.

Under the letter of intent, Counsel is to acquire 100% of the outstanding shares of Diversicare Canada for US$8 million. The transaction, expected to close on June 29, 2001, is subject to receipt of applicable corporate and regulatory approvals.

As part of the agreement, Counsel will be selling the three nursing homes it owns in Florida, which are currently leased by Advocat, for US$7.0 million. In addition, this transaction will allow Counsel to divest its three remaining U.S. nursing homes. Upon such divestiture, Counsel will no longer have any investment in the long term care business in the United States.

Counsel has been involved in the Canadian long term care sector since 1983. With the acquisition of Diversicare Canada, Counsel becomes a major participant in this sector. It will own or manage a total of 13 nursing homes and 23 assisted living facilities with approximately 1,800 licensed beds and 2,800 units, respectively.

Allan Silber, Chairman and CEO of Counsel said, "The Diversicare acquisition fits well with Counsel's strategy to maintain a diversified portfolio of businesses in both the old and new sectors of the economy. Diversicare Canada, combined with Counsel's existing Canadian long term care facilities, will provide consistent, and growing, revenues, earnings and cash flow."

"We see this as a tremendous opportunity to create value in an industry where we already have experience and understanding," added Mr. Silber. "We are very familiar with Diversicare Canada's people and operations and know that they will make a positive contribution to Counsel. With Diversicare's expertise in the long term care business, past record of positive earnings and cash flow, and Counsel's financial support, we can build one of Canada's premier companies in this industry."

About Counsel Corporation

Counsel Corporation (TSE:CXS / Nasdaq:CXSN) focuses on acquiring significant positions in, and actively managing for growth, a portfolio of operating companies. Counsel's strategic portfolio investments include companies that possess enabling technologies that provide a competitive advantage for their end users and have the potential to contribute to the transformation of the business environment: a 56% stake in marketing and sales effectiveness systems provider Proscape Technologies, Inc. (www.proscape.com); a 33% stake in e-marketer Impower, Inc. (www.impower.com); a 28% stake in e-learning application service provider IBT Technologies, Inc. (www.ibt-technologies.com); and a 13% stake in Internet data communications and services provider Core Communications Corporation (www.core.net).

Counsel Communications LLC is a wholly owned subsidiary of Counsel Corporation. Counsel Communications is focused on acquiring, consolidating and operating Internet telephony and other telecommunications-related businesses. In February 2001, Counsel Communications acquired 97.5% of Nexbell Communications Inc. (www.nexbell.com), a designated Cisco Powered Network member in the Voice over Internet Protocol (VoIP) category. On March 1, 2001, Counsel Communications acquired a 65% interest in I-Link Incorporated (Nasdaq:ILNK; www.i-link.com), an enhanced Internet Protocol voice and data communications service provider. On April 18, 2001, I-Link acquired Counsel's interest in Nexbell in exchange for shares, resulting in Counsel owning approximately 70% of I-Link. Most recently, I-Link acquired and commenced operations of a 10XXX "dial around" business with approximately US$70 million of annualized revenues. The Company's primary strategy is to develop one of the most sophisticated, next-generation communications networks in the US, providing efficient, leading-edge domestic and international VoIP connectivity as well as other related "value-added" and traditional telecommunications services.

In the medical products sector, Counsel's 78.5%-owned Sage BioPharma, Inc. subsidiary (www.sagebiopharma.com) develops and markets products used in the treatment of infertility. In long term care, Counsel owns six nursing homes in the U.S. and five retirement homes in Canada, all of which are leased to Advocat Inc. Counsel also leases seven nursing homes in Canada, managed by Advocat.

For further information, visit Counsel's website at www.counselcorp.com

This news release may include statements that constitute forward-looking statements, usually containing the words "believe," "estimate," "project," "expects," or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this document.