ASSIGNMENT  made as of May 31, 1996  between  Empire Blue Cross Blue Shield
     ("Assignor"), a New York Not-For-Profit Health Service Corporation,  having
     an  office  at 622  Third  Avenue,  New  York,  New York  10017,  and Merit
     Behavioral Care Corporation  ("Assignee"),  a New Jersey corporation having
     an office at One Maynard Drive Park Ridge, New Jersey 07656.

                               W I T N E S S E T H

     WHEREAS,  Assignor is the owner and holder of the tenant's leasehold estate
     under that certain lease dated as of August 14, 1991 ("Lease") with respect
     to a portion of the 6th floor and the entire 5th floor as more particularly
     described in the Lease  ("Demised  Premises") in the building  known as The
     Kent  Building,  666 Third Avenue,  New York,  New York 10017  ("Building")
     between Cooke Properties Inc. as landlord and Assignor, as tenant; and

     WHEREAS,  Assignor  desires to assign the Lease to  Assignee,  and Assignee
     desires to assume the rights and  obligations  of Assignor under the Lease,
     on the terms hereinafter set forth.

     NOW,  THERAFTER,  for good  and  valuable  consideration  the  receipt  and
     sufficiency  of  which  is  hereby  acknowledged,  Assignor  and  Assignee,
     intending to be legally bound agree as follows:

     1.  Assignor  hereby  assigns,  transfers,  releases  and  sets  over  unto
     Assignee,  without recourse, all of the estate right, title and interest of
     Assignor in, to and under the Lease

     TO HAVE AND TO HOLD the same unto  Assignee,  its  successors  and assigns,
     from and after the date hereof and for all the remainder of the term of the
     Lease,  subject to the rents,  covenants,  terms and  conditions  contained
     therein. The foregoing assignment is expressly made without  representation
     or warranty  (either express or implied) of any nature or kind, or recourse
     against Assignor, unless expressly set forth herein.

     1. Assignee  hereby  accepts the  assignment of the Lease from Assignor and
     hereby  assumes  the  obligation  to observe  and perform all of the terms,
     covenants  and  conditions of the Lease to be observed or  performed by the
     tenant  thereunder from and after the date hereof,  with the same force and
     effect as if the Assignee had executed the Lease originally  as the tenant
     named therein.

     2. Assignee hereby agrees to indemnify,  defend and hold Assignor  harmless
     from and against any and all manner of obligations, suits, claims, actions,
     damages,  charges,  liabilities,  losses,  costs  or  expenses  (including,
     without  limitation,  reasonable  attorneys' fees and disbursements)  which
     Assignor  may  directly  or  indirectly  sustain  or  which  may  arise  in
     connection with or by reason of Assignee's  failure to observe,  perform or
     comply with any of the obligations of the tenant under the Lease.

     3. Assignor hereby agrees to indemnify,  defend and hold Assignee  harmless
     from and against any and all manner or obligations, suits, claims, actions,
     damages,  charges,  liabilities,  losses,  costs  or  expenses  (including,
     without  limitation,  reasonable  attorneys' fees and disbursements)  which
     Assignee  may  directly  or  indirectly  sustain  or  which  may  arise  in
     connection with or by reason of Assignor's  failure to observe,  perform or
     comply with any of the  obligations  of the tenant under the Lease relating
     to the period of time prior to the date hereof.

     4.  Assignor  warrants  and  represents  that  (a) the  Lease  has not been
     modified  or  amended;  (b)  the  Lease  is in full  force  and  effect  in
     accordance  with its terms,  Assignor is not in default  thereunder  and no
     event has occurred or failed to occur  which,  with the giving of notice or
     the  passenger  of time or both,  would  constitute  a default by  Assignor
     thereunder;  and (c) Assignor owns the Lease free and clear of any liens or
     encumbrances  and has the power and authority to assign same to Assignee in
     accordance with this assignment.

     5. Except as may be expressly  herein  provided,  this assignment shall not
     create any rights in any third  parties  against  Assignor or Assignee  not
     otherwise heretofore in existence.

     6. This  assignment may not be amended or modified  except by an instrument
     in writing executed by the parties hereto.

     7. This assignment shall be binding upon and shall inure to the benefit of
     the parties hereto and their respective heirs, successors and assigns.

     IN  WTINESS  WHEREOF,   Assignor  and  Assignee  have  have  executed  this
     assignment as of the day and year frist written above.

                                        EMPIRE BLUE CROSS BLUE SHIELD

                                        By: /s/ Michael L. Kent
                                        ------------------------------
                                        Name: Michael L. Kent
                                        Title: Senior Vice President


                                        MERIT BEHAVIORAL CARE CORPORATION

                                        By: /s/ Louis T. Haggis
                                        ------------------------------
                                        Name: Louis T. Haggis
                                        Title: Vice President