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                                                                  Exhibit 10.18

Counsel Corporation
December 19, 1996
Page 1



                                LETTER AGREEMENT


                                December 19, 1996


Counsel Corporation
Two First Canadian Place
Suite 1300, P.O. Box 95
Toronto, Ontario
Canada M5X 1E3

     RE:  Registration Rights in connection with the purchase by Counsel
          Corporation ("Counsel") of 2,112,490 shares of Common Stock of
          Capstone Pharmacy Services, Inc. ("Capstone") on July 29, 1996

Gentlemen:

     This letter sets forth the registration rights that Counsel received in
connection with the above-referenced Common Stock. As you know, Capstone's Board
of Directors agreed to grant to Counsel substantially the same registration
rights as granted to Integrated Health Services, Inc. ("IHS") in the Symphony
acquisition. The above-referenced shares (the "Capstone Stock") will have
registration rights as set forth below. Except as otherwise indicated herein,
capitalized terms used in this Letter Agreement are defined as set forth in the
Asset Purchase Agreement between IHS, Sellers and Buyer (each as defined
therein), dated as of June 19, 1996 (the "Purchase Agreement").

          (a) Initial Registration. Unless all of the Capstone Stock has been
     registered pursuant to the terms of Section (b) hereof, as soon as is
     reasonably practicable but in any event by December 31, 1996, Capstone will
     cause to be prepared and filed with the Securities and Exchange Commission
     (the "Commission") (and will thereafter use its best efforts to have
     declared effective as soon as possible) an underwritten registration
     statement of all of the Capstone Stock on Form S-3 or its equivalent and
     such other documents, including a prospectus, as may be necessary in the
     opinion of both counsel for Capstone and counsel for the holders of the
     Capstone Stock in order to comply with the provisions of the Securities Act
     of 1933, as amended (the "Securities Act"), so as to permit an underwritten
     public offering and sale by Counsel of all or a portion of the Capstone
     Stock as elected by Counsel. Capstone shall give Counsel at least 30 days
     notice prior to filing a registration statement. Capstone shall be entitled
     to select the underwriter or underwriters for such registration statement.
     In the event that Counsel elects, in its sole discretion, to delay or defer
     the process, or to sell less than all shares of Capstone Stock owned by
     Counsel, Counsel may




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December 19, 1996
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     at any time after December 31, 1996 notify Capstone that it desires that
     the registration process commence or recommence (as the case may be) as to
     all or any of said shares, and thereupon Capstone shall commence or
     recommence (as the case may be) such process promptly and shall file within
     60 days of the Counsel notification (or prosecute the effectiveness of a
     registration statement if one is on file for Counsel) the registration
     statement and use its best efforts to cause it to become effective as soon
     as possible. Counsel may require Capstone to, and Capstone shall, file up
     to a total of two such underwritten registration statements during the two
     year period following Closing under the Purchase Agreement.

          (b) Piggyback Registration Rights. If the Capstone shall at any time
     propose to file a registration statement under the Securities Act for any
     sales of securities of the Capstone (i) on behalf of the holders of
     securities sold by Capstone in a private placement in April 1996 (the
     "April Holders") pursuant to a demand registration by such April Holders or
     (ii) any other filing Capstone shall give to Counsel written notice of such
     registration no later than thirty (30) days before its filing with the
     Commission; provided, that registrations relating solely to securities to
     be issued by Capstone in connection with any acquisition, employee stock
     option or employee stock purchase or savings or similar plan on Form S-4 or
     S-8 (or successor Forms) under the Securities Act shall not be subject to
     this Section (b). If Counsel so requests within fifteen (15) days of the
     sending of such notice, Capstone shall include all of the Capstone Stock in
     any such registration. However, Capstone shall not be obligated to include
     any portion (or all) of such Capstone Stock to the extent any underwriter
     or underwriters of such securities being otherwise registered by Capstone
     shall determine in good faith that the inclusion of such Capstone Stock (or
     any portion thereof) would jeopardize the successful sale of such other
     securities proposed to be sold by such underwriter or underwriters;
     provided, however that if such offering includes securities being offered
     for resale by other sellers of Capstone stock, then the Capstone Stock may
     be eliminated from such offering only to the extent that the securities
     being offered by such other sellers also are eliminated on a pari passu
     basis (except as otherwise set forth in this section). Notwithstanding the
     foregoing, in the case of a registration statement filed under item (ii) of
     this paragraph (b), to the extent any underwriter or underwriters for such
     registration statement shall determine that inclusion of all of the
     securities proposed to be sold would jeopardize the


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Counsel Corporation
December 19, 1996
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     successful sale of such securities, the shares of Capstone Stock shall be
     excluded from such registration statement prior to the exclusion of the
     securities of the April Holders. Capstone represents and warrants that
     there are no holders of shares of its common stock with registration rights
     not previously included in a registration statement, other than the April
     Holders, Counsel and IHS.

          (c) Registration Expenses. Capstone shall bear all reasonable expenses
     related to any registration referred to in paragraph (a). Such costs and
     expenses shall include, without limitation, all underwriters' and brokers'
     expenses exclusive of discounts and commissions applicable to the Capstone
     Stock, the fees and expenses of counsel for Capstone and of its
     accountants, all other costs, fees and expenses of Capstone incident to the
     preparation, printing, registration and filing under the Securities Act of
     the registration statement and all amendments and supplements thereto, the
     fees and expenses of one counsel to the Sellers relating to such
     registration, the cost of furnishing copies of each preliminary prospectus,
     each final prospectus and each amendment or supplement thereto to
     underwriters, dealers and Sellers.

          (d) Registration Procedures, Etc. In connection with the registration
     rights granted to the Sellers with respect to the Capstone Stock as
     provided in paragraph (a), Capstone covenants and agrees to:

              (1) use its best efforts to cause each registration under
     paragraph (a) to be declared effective and to remain effective (and in
     compliance with the Securities Act) by such action as may be necessary or
     appropriate for a period of two (2) years (plus an amount of time equal tot
     he number of days during which sales of Capstone Stock under such
     registration statement shall have been prohibited in any jurisdiction in
     which such securities are registered for sale by applicable law, court
     order or similar compulsion) after the effective date of such registration
     statement, or, if sooner, until an exemption from registration of the
     Capstone Stock becomes available to Sellers, including, without limitation,
     the filing of post-effective amendments and supplements to any registration
     statement or prospectus necessary to keep the registration statement
     current and the further qualification under any applicable Blue Sky or
     other state securities laws to permit such sale or distribution all as
     requested by holders of



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December 19, 1996
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     Capstone Stock. Capstone will immediately notify holders of Capstone Stock
     at any time when a prospectus relating to a registration statement under
     paragraph (a) is required to be delivered under the Securities Act, of the
     happening of any event as a result of which the prospectus included in such
     registration statement, as then in effect, includes an untrue statement of
     a material fact or omits to state any material fact required to be stated
     therein or necessary to make the statements therein not misleading in light
     of the circumstances then existing. Notwithstanding anything to the
     contrary contained herein, in the event that a registration is an
     underwritten offering, Capstone shall be required to maintain the
     effectiveness of the underwritten registration statement only for a
     reasonable period of time.

              (2) furnish, at least five business days before filing a
     registration statement that registers such Capstone Stock, a prospectus
     relating thereto or any amendments or supplements relating to such a
     registration statement or prospectus, to one counsel selected by the
     persons holding a majority of the Capstone Stock being so registered (the
     "Stockholder Counsel"), copies of all such documents proposed to be filed
     (it being understood that such five-business-day period need not apply to
     successive drafts of the same document proposed to be filed so long as such
     successive drafts are supplied to the Sellers in advance of the proposed
     filing by a period of time that is customary and reasonable under the
     circumstances);

              (3) notify in writing (which notice may be sent via fax or
     overnight courier) the Sellers promptly (i) of the receipt by Capstone of
     any notification with respect to any comments by the Commission with
     respect to such registration statement or prospectus or any amendment or
     supplement thereto or any request by the Commission for the amending or
     supplementing thereof or for additional information with respect thereto,
     to the extent that such comments or requirements relate to information
     regarding the persons selling Capstone Stock (ii) of the receipt by
     Capstone of any notification with respect to the issuance by the Commission
     of any stop order suspending the effectiveness of such registration
     statement or prospectus or any amendment or supplement thereto or the
     initiation or threatening of any proceeding for that purpose and (iii) of
     the receipt by Capstone of any notification with respect to the suspension
     of the



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Counsel Corporation
December 19, 1996
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     qualification of such Capstone Stock for sale in any jurisdiction or the
     initiation or threatening of any proceeding for such purposes;

              (4) use its best efforts to obtain the withdrawal of any order
     suspending the effectiveness of such registration statement, or the lifting
     of any suspension of the qualification or exemption from qualification of
     any of Capstone Stock for sale in any jurisdiction, at the earliest
     possible time;

              (5) use its best efforts to register or qualify such Capstone
     Stock under such other securities or blue sky laws of such jurisdictions as
     the Sellers selling Capstone Stock reasonably request and any and all other
     acts and things which may be reasonably necessary or advisable to enable
     such persons to consummate the disposition in such jurisdictions of
     Capstone Stock; provided, however, that Capstone will not be required to
     qualify generally to do business, subject itself to general taxation or
     consent to general service of process in any jurisdiction where it would
     not otherwise be required to do so but for this subparagraph (5);

              (6) furnish to the persons selling Capstone Stock such number of
     copies of a summary prospectus or other prospectus, including a preliminary
     prospectus, in conformity with the requirements of the Securities Act, and
     such other documents as such persons may reasonably request in order to
     facilitate the public sale or other disposition of such Capstone Stock;

              (7) use its best efforts to cause such Capstone Stock to be
     registered with or approved by such other governmental agencies or
     authorities as may be necessary by virtue of the business and operations of
     Capstone to enable the persons selling Capstone Stock to consummate the
     disposition of such Capstone Stock;

              (8) notify the persons selling Capstone Stock on a timely basis at
     any time when a prospectus relating to such Capstone Stock is required to
     be delivered under the Securities Act of the happening of any event as a
     result of which the prospectus included in such registration statement, as
     then in effect, includes an untrue statement of a material fact or omits to
     state a material fact required to be stated therein or necessary to make
     the statements therein not misleading in light of the circumstances then
     existing and, at the request of such persons, prepare and furnish to



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Counsel Corporation
December 19, 1996
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     such persons a reasonable number of copies of a supplement to or an
     amendment of such prospectus as may be necessary so that, as thereafter
     delivered to the offerees of such shares, such prospectus shall not include
     an untrue statement of a material fact or omit to state a material fact
     required to be stated therein or necessary to make the statements therein
     not misleading in light of the circumstances then existing;

              (9) make available for inspection by the persons selling Capstone
     Stock, any underwriter participating in any disposition pursuant to such
     registration statement and any attorney, accountant or other agent retained
     by such persons or underwriter (collectively, the "Inspectors"), all
     pertinent financial and other records, pertinent corporate documents and
     properties of Capstone (collectively, the "Records"), as shall be
     reasonably necessary to enable them to exercise their due diligence
     responsibility, and cause Capstone's officers, directors and employees and
     any person possessing such information on behalf of Capstone to supply all
     information (together with the Records, the "Information") reasonably
     requested by any such Inspector in connection with such registration
     statement; provided that any of the Information which Capstone determines
     in good faith to be confidential, and of which determination the Inspectors
     are so notified, shall not be disclosed by the Inspectors unless (i) the
     disclosure of such Information is necessary to avoid or correct a
     misstatement or omission in the registration statement, (ii) the release of
     such Information is ordered pursuant to a subpoena or other order from a
     court or government agency of competent jurisdiction or (iii) such
     Information has been made generally available to the public; provided,
     however, that each such person agrees that it will, upon learning that
     disclosure of such Information is sought in a court of competent
     jurisdiction, give notice to Capstone and allow Capstone, at its expense,
     to undertake appropriate action to prevent disclosure of the Information
     deemed confidential;

              (10) use its best efforts to obtain from its independent certified
     public accountants "cold comfort" letters addressed to Counsel and each
     person selling Capstone Stock in customary form and at customary times and
     covering matters of the type customarily covered by cold comfort letters;





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Counsel Corporation
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              (11) use its best efforts to obtain from its counsel an opinion or
     opinions addressed to Counsel in customary form covering matters of the
     type customarily covered by such opinions;

              (12) provide a transfer agent and registrar (which may be the same
     entity and which may be Capstone) for such Capstone Stock;

              (13) issue to any underwriter to which the Sellers selling
     Capstone Stock may sell shares in such offering certificates evidencing
     such Capstone Stock (following surrender of any existing certificate for
     such securities);

              (14) otherwise use its best efforts to comply with all applicable
     rules and regulations of the Commission and make available to Capstone's
     security holders, as soon as reasonably practicable, publicly available
     earnings statements (which need not be audited) covering a period of twelve
     (12) months beginning within three (3) months after the effective date of
     the Registration Statement, which earnings statements shall satisfy the
     provisions of Section 11(a) of the Securities Act; and

              (15) use its best efforts to take all other steps necessary to
    effect the registration of such Capstone Stock contemplated hereby.

          (e) Indemnification Procedures, Etc.

              (1) The information included or incorporated by reference in the
     registration statements filed pursuant to paragraph (a) will not, at the
     time any such registration statement becomes effective, contain any untrue
     statement of a material fact, or omit to state any material fact required
     to be stated therein as necessary in order to make the statements therein,
     in light of the circumstances under which they were made, not misleading or
     necessary to correct any statement in any earlier filing of such
     registration statement or any amendments thereto. The registration
     statements will comply in all material respects with the provisions of the
     Securities Act and the rules and regulations thereunder. Capstone shall
     indemnify the holders of Capstone Stock to be sold pursuant to any
     registration statement, their successors and assigns, and each person, if
     any, who controls such holders within the meaning of ss.15 of the
     Securities Act or ss.20(a) of the Securities




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Counsel Corporation
December 19, 1996
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     Exchange Act of 1934, as amended (the "Exchange Act") against any and all
     loss, claim, damage, expense or liability (including all expenses
     reasonably incurred in investigating, preparing or defending against any
     claim whatsoever) to which any of them may become subject under the
     Securities Act, the Exchange Act or any other statute, common law or
     otherwise, arising out of or based upon any untrue statement or alleged
     untrue statement of a material fact contained in such registration
     statement executed by Capstone or based upon Written information furnished
     by Capstone filed in any jurisdiction in order to qualify Capstone Stock
     under the securities laws thereof or filed with the Commission, any state
     securities commission or agency, NYSE or any securities exchange; or the
     omission or alleged omission therefrom of a material fact required to be
     stated therein or necessary to make the statements contained therein not
     misleading, unless such statement or omission was made in reliance upon and
     in conformity with written information furnished to Capstone by the holder
     or its affiliate seeking indemnification expressly for use in such
     registration statement, any amendment or supplement thereto or any
     application, as the case may be. If any action is brought against the
     holders or any controlling person of the holders in respect of which
     indemnity may be sought against Capstone pursuant to this subparagraph
     (e)(1), the holders or such controlling person shall promptly, and in any
     event, within thirty (30) days (provided that the failure to give prompt
     notice shall not relieve the indemnifying party of its indemnification
     obligation but such obligation shall be reduced by any damages suffered by
     such party resulting from a failure to give prompt notice) after the
     receipt thereby of a summons or complaint, notify Capstone in writing of
     the institution of such action and Capstone shall assume the defense of
     such actions, including the employment and payment of reasonable fees and
     expenses of counsel (reasonably satisfactory to the holders or such
     controlling person). The holders or such controlling person shall have the
     right to employ its or their own counsel in any such case, but the fees and
     expenses of such counsel shall be at the expense of the holders or such
     controlling person unless (A) the employment of such counsel shall have
     been authorized in writing by Capstone in connection with the defense of
     such action, or (B) Capstone shall not have promptly employed counsel to
     have charge of the defense of such action, or (C) such indemnified party or
     parties shall have reasonably concluded that there may be defenses
     available to it or them which are different from or additional to those
     available to Capstone (in which case, Capstone shall not have the right




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Counsel Corporation
December 19, 1996
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     to direct the defense of such action on behalf of the indemnified party or
     parties), in any of which events the reasonable fees and expenses of not
     more than one additional principal firm of attorneys (and, if necessary,
     applicable firms to serve as local counsel) for the holders and/or such
     controlling person shall be borne, by Capstone. Except as expressly
     provided in the previous sentence, in the event that Capstone shall have
     assumed the defenses of any such action or claim, Capstone shall not
     thereafter be liable to such holders or such controlling person for their
     expenses in investigating, preparing or defending any such action or claim,
     except for reimbursement of expenses incurred at Capstone's request (e.g.,
     attending depositions etc.). Capstone agrees promptly to notify the holders
     of the commencement or any litigation or proceedings against Capstone or
     any of its officers, directors or controlling persons in connection with
     the resale of Capstone Stock or in connection with such registration
     statement.

              (2) Each holder of Capstone Stock to be sold pursuant to a
     registration statement, and his successors and assigns, shall severally,
     and not jointly, indemnify Capstone, any underwriter, its or their officers
     and directors and each person, if any, who controls Capstone or any
     underwriter within the meaning of ss.15 of the Securities Act or ss.20(a)
     of the Exchange Act against any and all loss, claim, damage, or expense or
     liability (including all expenses reasonably incurred in investigating,
     preparing or defending against any claim whatsoever) to which they may
     become subject under the Securities Act, the Exchange Act or any other
     statute, common law or otherwise, arising from information containing any
     untrue statement of a material fact furnished in writing by or on behalf of
     such holder, or his successors or assigns for specific inclusion in such
     registration statement. However, in no event shall the obligation of a
     seller of Capstone Stock hereunder exceed the price received by such seller
     for such shares.

              (3) If the indemnification provided for in this paragraph (e) is
     held by a court of competent jurisdiction to be unavailable to an
     indemnified party with respect to any loss, claim, damage, expense,
     liability or action referred to herein, then the indemnifying party, in
     lieu of indemnifying such indemnified party hereunder, shall contribute to
     the amounts paid or payable by such indemnified party as a result of such
     loss, claim, damage, expense, liability or action in such proportion as is
     appropriate to reflect the relative fault of the indemnifying party on the
     one




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     and of the indemnified party on the other in connection with the statement
     or omissions which resulted in such loss, claim, damage, expense, liability
     or action as well as any other relevant equitable considerations. The
     relevant fault of the indemnifying party and of the indemnified party shall
     be determined by reference to, among other things, whether the untrue or
     alleged untrue statement of a material fact or the omission or alleged
     omission to state a material fact relates to information supplied by the
     indemnifying party or by the indemnified party and the parties' relative
     intent, knowledge, access to information and opportunity to correct or
     prevent such statement or omission. However, in no event shall the
     obligation of a seller of Capstone Stock hereunder exceed the price
     received by such seller for such shares.

          (f) Carve Back Agreement. In the event that the shares of Capstone
     Stock that Counsel proposes to register in a registration under paragraph
     (a) is carved back or reduced by an underwriter or by Capstone, Counsel
     shall be entitled to a shelf registration on Form S-3 in accordance with
     paragraph (a) (in a form similar to Section 2.5 of the Purchase Agreement
     as if not amended by Amendment No. 1 to the Purchase Agreement) covering
     the number of shares that were subject to the carve back.

     Please recall that Counsel Corporation has agreed to not exercise its
     registration rights in a manner which would adversely affect the
     registration rights of IHS.

     If you are in agreement with the foregoing, please indicate your acceptance
by executing this Letter Agreement and returning it to Capstone.

                                        Very truly yours,

                                        CAPSTONE PHARMACY SERVICES, INC.


                                        By:__________________________________


                                        Its:_________________________________

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Counsel Corporation
December 19, 1996
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ACCEPTED BY:

Counsel Corporation

By:________________________________

Its:_______________________________