FIRST AMENDMENT TO LEASE AGREEMENT


     THIS FIRST  AMENDMENT TO LEASE  AGREEMENT,  made as of the lst day of July,
     1996,  by and between  SARTAK  HOLDINGS,  INC.,  a New Jersey  corporation,
     successor in interest to National Utility Service, Inc., "Lessor" and MERIT
     BEHAVIORAL  CARE CORP.,  a Delaware  corporation,  successor in interest to
     Medco Behavioral Care Corporation,  "Lessee". W I T N E S S E T H: WHEREAS,
     Lessors predecessor in interest, National Utility Service, Inc. and Lessees
     predecessor in interest Medco  Behavioral Care  Corporation  entered into a
     Lease dated as of  November  30, 1993 (the  "Lease")  for certain  Premises
     described in the Lease; and WHEREAS,  the Commencement Date of the Lease is
     January 31,  1994 and the  termination  of the initial  term is January 31,
     2004; and

     WHEREAS, Lessee exercised its right to lease the Expansion Space as defined
     in the Lease and consisting of 5,119 rentable square feet; and

     WHEREAS,  Lessee has requested  that Lessor lease to it  additional  office
     area in the  Building;  and  WHEREAS,  Lessor and Lessee  wish to amend the
     Lease as hereinafter  provided.  NOW,  THEREFORE,  in  consideration of the
     mutual covenants herein made and other good and valuable consideration, the
     parties hereto agree as follows:  1. All definitions and terms set forth in
     the Lease shall have the same meaning herein except as specifically amended
     or otherwise  intended to have a different  meaning.  2. (a) Lessor  hereby
     leases to Lessee  and Lessee  hereby  leases the  following  space:  15,973
     rentable  square  feet  located  on the  second  floor,  north  wing of the
     Building (the "Additional


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     Premises")  for the same  purposes as set forth in  Paragraph  First of the
     Lease. (b) Lessor at its cost and expense shall provide a "turn-key" fit up
     of the Additional Premises with plans (the "AP Plans") mutually agreed upon
     by Lessor and Lessee,  provided that the fitup of the  Additional  Premises
     shall be with  improvements  and finishes  comparable to those  provided by
     Lessor in the  Expansion  Space (the "AP  Fitup"),  (c)  Subject to Lessors
     receipt  of sealed  construction  documentation  documents  and Plans  from
     Lessee by July 15, 1996 Lessor will undertake the AP Fitup and use its best
     efforts to complete such fitup on or about September 30, 1996. Lessor shall
     give Lessee five (5) days prior written notice of the date it estimates the
     AP Fitup will be substantially completed. 3. The term of the Lease shall be
     extended for a period of ten (10) years  commencing  October 1, 1996 and to
     end at 12:00 midnight  September 30, 2006 (the "New Term").  4. On the date
     which is the later of (i)  October  1, 1996 or (ii) the date upon which the
     AP Fitup has been  substantially  completed as set forth in Lessor's notice
     referred  to in  Paragraph  2 (c)  above,  (the "AP  Commencement  Date") ,
     Lessee's  rights in and to the lease and occupancy of the  Expansion  Space
     shall terminate and Lessee shall vacate such space as of such date. 5. From
     and  after  the date  hereof to the AP  Commencement  Date the  Basic  Rent
     payable by Lessee and all Additional  Rent payable under the Lease shall be
     the same as is due from Lessee as of the date hereof.  Commencing on the AP
     Commencement  Date the Basic Rent for the Premises  described in the Lease,
     exclusive of the Expansion Space and constituting  original 21,480 rentable
     square feet leased to Lessee under the Lease (the "Initial  Premises") plus
     the Additional  Premises  shall be as follows,  based upon the aggregate of
     the Initial Premises and Additional  Premises  (collectively  the "Combined
     Premises") being 37,453 rentable square feet:  October 1, 1996 to September
     30, 1997 in the amount of $595,502.70  calculated at the rate of $15,90 per
     rentable


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     square foot payable in equal monthly installments of $49,625.23; October 11
     1997 to January 31,  1999 in the amount of  $969,283,63  calculated  at the
     rate  of  $19.41  per  rentable   square  foot  payable  in  equal  monthly
     installments  of  $60,580.23;  February 1, 1999 to September 30, 2001,  the
     amount  of  $2,298,811.60  calculated  at the rate of $23.01  per  rentable
     square  foot  payable in equal  monthly  installments  of  $71,816.13;  and
     October  1, 2001 to  September  30,  2006 in the  amount  of  $4,213,462.50
     calculated at the rate of $22.50 per rentable  square foot payable in equal
     monthly installments of $70,224.375.  In the event the AP Commencement Date
     is other  than the first day of the  month,  the Basic  Rent for such month
     shall be prorated,  If the  Additional  Premises  have been  completed  and
     occupied  by Lessee  prior to  October  1.  1996,  the New Basic Rent shall
     nevertheless  become  effective on October 1, 1996.  6. Lessee shall pay to
     Lessor an amount not to exceed  $50,000  against  Lessors costs to retrofit
     the Expansion space ("Retrofit  Cost") to be vacated on the AP Commencement
     Date.  The term  "retrofit"  shall  mean the  removal  of all  improvements
     presently located in the Expansion Space and the improvements undertaken by
     Lessor  to  make  such  provision  ready  for a new  tenant  after  the  AP
     Commencement  Date,  For the  period  commencing  October  11 1997  through
     September 30, 2001 (the "Repayment Period"),  Lessee shall pay to Lessor as
     Additional  Rent the sum of $0.42 per rentable  square foot of the Combined
     Premises for each twelve (12) month period from October 1 through September
     30, If the retrofit is  completed  prior to October 1, 1997 then the actual
     cost thereof shall be utilized to determine the Retrofit Cost, which sum up
     to $50,000 shall be amortized over the Repayment  Period.  In the event the
     retrofit has not been completed by October 1, 1997 and Lessee has commenced
     the  payment  at the start of the  Payment  Period,  when the  retrofit  is
     completed and if the costs of the retrofit is less than  $50,000,  then the
     Retrofit Cost payable during


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     the Payment Period shall be recalculated to equal the actual cost to Lessor
     and  any  overpayments  made  by  Lessee  shall  be  credited  against  the
     recalculated  payments next due from Lessee.  Lessor shall  provide  Lessee
     with  reasonable   documentation  supporting  the  Retrofit  Cost  and  the
     calculation of the payment for the Repayment  Period upon completion of the
     retrofit.  7. On and after the AP Commencement Date the term "Premises" and
     "Demised  Premises"  whenever  used in the Lease  shall  mean the  combined
     Premises defined herein. 8. On and after the AP Commencement  Date, Lessees
     proportionate  share  whenever that phrase is used,  shall be 26,745% (with
     respect to a rentable area of 37,453 square feet which the parties agree is
     the proper square footage of the Combined  Premises and that these shall be
     no further measurement  thereof).  9. Lessor and Lessee agree that the Base
     Period  defined  in the  Lease  shall  remain as 1994 and shall be the Base
     Period  utilized  with  respect to the  Combined  Premises.  10.  Paragraph
     Twenty-Fifth of the Lease is hereby deleted in its entirety.  11. Paragraph
     Thirty-Fourth  of the  Lease  is  hereby  amended,  effective  as of the AP
     Commencement  Date to  provide  that  Lessee's  occupancy  of the  Combined
     Premises  (as the 37,453  rentable  square  feet shall  include 142 parking
     spaces,  of which 16 shall be  reserved  as set forth on  Schedule I to the
     Lease.  12.  Lessor and Lessee hereby  confirm the  provisions of Paragraph
     Thirty-Sixth  of the Lease with respect to the Brokers  instrumental in the
     leasing  of the  Additional  Premises  and that  Lessor  shall pay the fees
     therefor  in  accordance  with the terms of a separate  agreement.  13. The
     first paragraph of Paragraph Fortieth of the Lease is hereby deleted in its
     entirety.  The second paragraph of Paragraph  Fortieth is hereby amended to
     provide that Lessee shall have the right to terminate the Lease,  effective
     as of the end of the New Term Fifth Lease year, that


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     is September 30, 2001, upon not less than nine (9) months notice as thereon
     provided;  that the reference to the calculation of unamortized costs as to
     the Initial  Premises  shall  remain as thereon  set forth,  but that there
     shall be added to such  calculation  the Lessor's  unamortized  cost of the
     improvements  to  the  Additional   Premises  as  provided  in  this  First
     Amendment.  The  aggregate  cost of the foregoing  unamortized  costs shall
     constitute  the payment for the Early  Termination  Right.  All  references
     therein  to  the  Expansion   Space  is  hereby  deleted.   14.   Paragraph
     Forty-Fourth  of the Lease is hereby  amended in its  entirety  as follows:
     "FORTY-FOURTH - EXPANSION OPTION.

        So long as Lessee is not in default  hereunder  after the  expiration of
any applicable grace period, Lessee shall have a right of first refusal to lease
the space adjacent to the Demised Premises  currently  occupied by Possehl Inc.,
subject to Possehl Inc. rights thereto pursuant to its lease (the "New Expansion
Space") upon the same terms and  conditions  offered in writing by any unrelated
third party to Lessor and which Lessor is willing to accept,  provided:  (i) not
less than three (3) years remain on the Lease term, including any extensions, if
Lessee  shall have given  notice  effective  to extend the term under  Paragraph
FIFTY-FIFTH  and (ii) the tenant  fitup set forth in the  unrelated  third party
offer shall be proportionally  reduced by the same percentage that the number of
months that have  elapsed  from the  Commencement  Date bears to the lease term.
Lessee shall have twelve (12) days from the date Lessor gives written  notice to
Lessee of the amount of  contiguous  space  proposed to be leased and the terms,
together  with a copy of the  written  offer,  within  which to accept or reject
Lessor's offer to lease such  contiguous  space.  If Lessee elects to lease such
contiguous  space,  then the terms and rent shall be at the rate  offered by the
unrelated third party, except that the term for the New Expansion Space shall be
coterminous with the Term for the Premises.  Tenant shall pay Additional Rent on
the New Expansion Premises in the same manner and utilizing the same Base Period
as utilized in  connection  with the Demised  Premises,  Lessee's  Proportionate
Share for the New Expansion  Space shall be determined by the  percentage  which
reflects the  percentage  the New  Expansion  Space bears to the total  rentable
square  footage of the Building.  The rent  commencement  date for the Expansion
Space shall commence on the date Lessors Work has been  substantially  completed
as such term is defined in  Paragraph  THIRTY-NINTH.  Except with respect to the
rent as set forth  herein,  upon the delivery of possession of the New Expansion
Space to Lessee by Lessor,  the New Expansion Space shall be deemed to be a part
of the  Demised  Premises  and subject to all the terms and  conditions  of this
Lease  including the Lease  Termination  Date and Renewal  Option,  The right of
first refusal granted to Lessee pursuant to this Paragraph FORTYFOURTH shall not
be deemed to extend to any space in the Building contiguous to the New Expansion
Space."




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        15. Except as  specifically  set forth in this First  Amendment to Lease
and except for any inconsistencies between the Lease and this First Amendment in
which case the First Amendment shall prevail,  the parties agree in all respects
that the  terms  and  conditions  of the Lease  shall  remain in full  force and
effect.

      IN WITNESS WHEREOF, the parties have hereunto set their hands and seals as
of the day and year first above written.

WITNESS:                                    LESSOR:
                                            SARTAK HOLDINGS, INC.

/s/                                         By:/s/ Sarkis Soultanian, President


WITNESS:                                    LESSOR:
                                            MERIT BEHAVIORAL CARE CORP.

/s/                                         By: /s/ Arthur H. Halper
                                                   Executive Vice President and
                                                   Chief Financial Officer




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