Dixie National Corporation makes announcement.

JACKSON, Miss.--(BUSINESS WIRE)--April 11, 1995--Dixie National Corporation (NASDAQ:DNLC) of Jackson, Mississippi, announced today its intended entry into the healthcare market with the signing of an agreement to acquire a 16% equity interest in Phoenix Medical Management and a related option to acquire 100% of the Arizona-based healthcare management company.

The agreement calls for Dixie to issue 2,100,000 new shares of common stock to Amarante Financial S.A. of British Virgin Islands in exchange for an initial 16% equity interest in Phoenix Medical Management plus an option to acquire the balance of the company for an additional 10,400,000 shares of Dixie National common stock.

Phoenix Medical Management has developed and test marketed Advanced Pain Management Institute/SurgiNet medical facilities in Arizona and Louisiana over the past two years. Its Phoenix facility has been in successful trial operation since January 1995 and began normal operations in April. Additional clinics are scheduled to open in Lafayette and New Orleans, Louisiana, in June and September 1995, respectively. Phoenix Medical Management revenues will be derived from operations of the three initial medical facilities and from marketing, billing and practice management services provided to future clinics.

Advanced Pain Management Institute/SurgiNet specializes in the comprehensive treatment of patients seeking relief from chronic pain in outpatient surgical facilities. Each facility is designed and equipped to accommodate a multi-modality pain management, psychological and physical rehabilitation program. Each facility will also generate ancillary revenues by accommodating non-affiliated surgeons who perform their own "non-pain" related surgical procedures at these facilities. The New Orleans facility, scheduled to open in September, has already received substantial physician commitments for ancillary use.

Pain medicine is recognized by the American Medical Association as a subspecialty of anesthesia. Phoenix Medical Management estimates that chronic and acute pain afflict over one-third of the people in the United States, with resultant lost work-days costing billions of dollars annually. Outpatient surgery is the fastest growing cost reduction trend in the healthcare industry today. Medicare and other third-party payers encourage physicians to use free-standing outpatient centers, such as Advanced Pain Management Institute/SurgiNet, to substantially reduce the total cost of services rendered. Dixie National believes that this specialization represents a significant niche in the growing healthcare market.

In a move related to the pending consolidation of its operations into the healthcare industry, Dixie also announced the signing of a letter of intent to sell all the stock in its present major asset subsidiary, Dixie National Life Insurance Company, to Standard Management Corporation, an Indiana-based insurance holding company. Proceeds of the sale will be used to satisfy virtually all company debt and to expedite the repositioning of Dixie into the health care industry.

The proposal with Standard Management calls for Dixie National to receive up to $8,580,000 for its life insurance subsidiary, depending on adjustments for statutory capital and surplus and receivables at time of closing. Major components of the sale include the retirement of a $3,689,000 term loan obligation held by a Standard Management subsidiary and the payoff of $1,720,000 subordinated convertible notes held by private investors. In addition, Dixie will receive $2,500,000 in cash and Standard Management Corporation common stock worth $500,000.

Universal Management Services of Scottsdale, Arizona, assisted Dixie in securing the agreements announced today, including the private placement of new Dixie National stock. Dixie will continue to utilize Universal Management Services in its refocused efforts to discover new opportunities to maximize earnings and shareholder value.

Commenting on the agreements, Dixie National Corporation's newly elected Chairman and CEO Leroy Reed said, "I hope today's announcements will be a clear signal to our shareholders that Dixie is making a timely and logical shift into an industry which has attractive growth potential. Phoenix Medical Management and Advanced Pain Management Institute/SurgiNet were selected to enable us to move as advantageously as possible from our traditional life and accident & health insurance focus into an allied, but growing, market which is not unrelated to our old business. I am excited about our new prospects."

CONTACT: Dixie National Corporation, Jackson

Robert Neal, 601/982-8210