Document:

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                    FIRST AMENDMENT TO RESTRUCTURE AGREEMENT

       THIS FIRST AMENDMENT is made as of the 5th day of January, 2002 by and
between PALISADE CONCENTRATED EQUITY PARTNERSHIP, L.P. ("Palisade"), Dean J.
Yimoyines ("Dr. Yimoyines") and OPTICARE HEALTH SYSTEMS, INC. ("OptiCare").

                               W I T N E S S E T H

       WHEREAS, OptiCare, Palisade and Dr. Yimoyines entered into a certain
Restructure Agreement dated the 17th day of December 2001 (the "Restructure
Agreement"), which Restructure Agreement is subject to, among other things,
further negotiation between Palisade and Bank Austria Creditanstalt Corporate
Finance, Inc. as agent for the lenders ("Bank Austria") with regard to the
nature and amount of credit support that was to be supplied by Palisade to Bank
Austria in connection with a promissory note of OptiCare to be issued to Bank
Austria pursuant to the Restructure Agreement, and Palisade and Bank Austria
have determined that a satisfactory agreement regarding such credit support
cannot be reached, and

       WHEREAS, OptiCare and Palisade now desire to modify the Restructure
Agreement to provide for Palisade and Dean J. Yimoyines, M. D. ("Dr. Yimoyines")
to make a loan to OptiCare in the amount of $14MM and an equity investment of
$4MM in OptiCare's participating preferred stock as described herein in order to
enable OptiCare to settle in full the obligations of OptiCare to Bank Austria,
thereby eliminating the need for such promissory note and such credit support,
and

       WHEREAS, Palisade, OptiCare, and Dr. Yimoyines are desirous of amending
the Restructure Agreement to reflect such terms.

       NOW, THEREFORE, the parties hereto agree as follows:

       1. Paragraph D of the Section entitled "Background" is amended in its
entirety to read as follows:

          "Palisade has agreed, and Dr. Yimoyines, at Palisade's insistence, and
          as a condition to Palisade's investment in OptiCare, has agreed, on
          the terms and subject to the conditions set forth in this Agreement,
          to make preferred stock investments in, and to provide loans to,
          OptiCare and certain of its subsidiaries, as provided below, to permit
          OptiCare and certain of its subsidiaries to repay Bank Austria its
          debt at a substantial discount and to repay the advance by Alexander
          Enterprise under the Amended Bridge Loan. In exchange for such
          preferred stock investments and such loans, Palisade and Dr. Yimoyines
          shall

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          receive new participating preferred stock and warrants in OptiCare
          (collectively, the "Warrants") and subordinated notes of OptiCare, all
          as further described herein. All references in this Agreement to "Dr.
          Yimoyines" with respect to such investment and the purchase of such
          securities shall mean Dr. Yimoyines or his spouse, family members, or
          a trust for the benefit of any of his family members."

       2. Paragraph E. of the Section entitled "Background" is amended by
deleting "in reliance in part on credit support to be provided by Palisade." and
by inserting in its place the words "contingent upon the cash investments and
loans to be provided by Palisade and Dr. Yimoyines."

       3. Paragraph F of the Section entitled "Background" is amended in its
entirety to read as follows:

          "Palisade proposes to provide the investment and loan described herein
          in order to allow OptiCare to make the cash payment to Bank Austria
          described in Paragraph 2.12 in order to induce Bank Austria to accept
          payment from OptiCare of significantly less than the debt due to it in
          full settlement."

       4. The first full sentence of Section 1. is amended by replacing the word
"Warrant " with the word "Warrants", and by inserting the words "shares of"
immediately following the words "the authorized number of."

       5. The third and fourth sentences of Section 1. are amended and replaced
in their entirety by the following:

          "This Agreement is contingent upon OptiCare and Bank Austria entering
          into a definitive written agreement acceptable to Palisade in its sole
          discretion regarding the nature and amount of cash to be paid by
          OptiCare to Bank Austria in consideration for extinguishing all claims
          of Bank Austria against OptiCare (the "Bank Austria Contingency"). At
          any time from and after the date hereof, if either OptiCare or
          Palisade, in its sole judgment, determines that a definitive agreement
          satisfactory to it in all respects resolving the Bank Austria
          Contingency has not been entered into, OptiCare or Palisade may, upon
          notice to the other, terminate this Agreement. "

                                                                               2
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       6. Section 2 is amended and replaced in its entirety by the following:

          "2. RESTRUCTURE DOCUMENTS. Subject to the conditions in this
          Agreement, OptiCare, Palisade, and Dr. Yimoyines agree to the
          following terms and to execute and deliver the following documents
          (collectively, the "Restructure Documents"):

                       2.1. OptiCare is authorizing the issuance of 3,500,000
               shares of Series B 12.5% voting convertible participating
               preferred stock having terms substantially as set forth in the
               Certificate of Designation attached as Schedule 2.1 (the "New
               Preferred Stock") with an aggregate initial redemption value of
               $1.40 per preferred share, for each share of New Preferred Stock
               convertible into OptiCare Common Stock initially on a ten-for-one
               basis (subject to adjustment as provided therein), with voting
               rights on an as converted basis with OptiCare's Common Stock, as
               provided therein, at any time and having the other terms
               described therein, and will recommend that OptiCare's
               shareholders approve an increase in the amount of authorized
               shares of Common Stock to provide for the possible future
               exercise of warrants being granted to Palisade and Dr. Yimoyines
               and conversion of the New Preferred Stock along with the other
               Shareholder Proposals.

                       2.2. On the Effective Date, OptiCare will deliver (in
               addition to shares of New Preferred Stock delivered pursuant to
               Paragraphs 2.9 and 2.10) a certificate representing 2,571,429
               shares of the New Preferred Stock to Palisade and a certificate
               representing 285,714 shares of New Preferred Stock to Dr.
               Yimoyines.

                       2.3. In connection with Palisade providing a loan to
               OptiCare totaling $13,900,000 as set forth in Paragraph 2.6, on
               the Effective Date, OptiCare will issue a warrant (the "Palisade
               Warrant") to Palisade, permitting a purchase of 17,375,000 shares
               of OptiCare Common Stock, a copy of which Palisade Warrant is
               annexed as "Schedule 2.3".

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                       In connection with Dr. Yimoyines providing a loan as set
               forth in Paragraph 2.6, on the Effective Date, OptiCare will
               issue a warrant (the "Yimoyines Warrant") to Dr. Yimoyines,
               permitting a purchase of 125,000 shares of OptiCare Common Stock,
               which Yimoyines Warrant will be substantially identical to the
               Palisade Warrant.

                       2.4. In payment of the New Preferred Stock, Palisade
               shall, on the Effective Date, pay OptiCare a total of $3,600,000
               and Dr. Yimoyines shall, on the Effective Date, pay OptiCare, in
               immediately available funds, a total of $400,000, each pursuant
               to the wire transfer instructions set forth in "Schedule 2.4".

                       2.5. OptiCare is borrowing from CapitalSource on the
               Effective Date approximately $7,000,000 on an asset-based line
               and an additional $3,000,000 under an equipment term loan, all
               pursuant to the CapitalSource loan documents.

                       2.6. Palisade shall, on the Effective Date, loan to
               OptiCare $13,900,000 pursuant to the subordinated secured note
               from OptiCare and its subsidiaries to Palisade (the "Palisade
               Note") annexed as "Schedule 2.6".

                       Dr. Yimoyines shall, on the Effective Date, loan to
               OptiCare $100,000 pursuant to a subordinated secured note from
               OptiCare and its subsidiaries to Dr. Yimoyines (the "Yimoyines
               Note"), which Yimoyines Note will be substantially identical to
               the Palisade Note.

                       The Palisade Note and the Yimoyines Note shall each bear
               interest at 11.5% per annum and shall have a maturity date of ten
               (10) years from the Effective Date.

                       2.7. To secure the Palisade Note and the Yimoyines Note,
               OptiCare and its subsidiaries shall grant a security interest in
               all of their assets, second and subordinate in all respects to
               the security interest of

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               CapitalSource. Palisade and Dr. Yimoyines agree to execute a
               subordination agreement reasonably acceptable to CapitalSource.

                       2.8. OptiCare will use a portion of the proceeds of the
               loans from CapitalSource, Palisade and Dr. Yimoyines and the
               stock investments by Palisade and Dr. Yimoyines to settle the
               claims of Bank Austria in full and to acquire certain assets of
               Bank Austria pursuant to a Bank Austria Restructure Agreement to
               be entered into by OptiCare and Bank Austria (which shall be
               acceptable to Palisade in its sole discretion).

                       2.9. OptiCare will use a portion of the proceeds of the
               stock investments by Palisade and Dr. Yimoyines to repay
               $2,300,000 of principal plus interest of the Amended Bridge Loan
               to Alexander Enterprise pursuant to the payoff agreement and
               instructions attached as "Schedule 2.9".

                       2.10. As of the Effective Date, Palisade, as a
               participant in the Amended Bridge Loan pursuant to the
               Participation Agreement relating thereto, executed in connection
               therewith and dated as of January 5, 2001 (the "Bridge Loan
               Participation Agreement"), shall be issued, in lieu of cash
               payment on account of its participation in the principal amount
               of $400,000 in the Amended Bridge Loan, 285,714 shares of
               OptiCare New Preferred Stock, plus additional shares of New
               Preferred Stock for accumulated interest.

                       2.11. As of the Effective Date, Linda Yimoyines, as a
               participant in the Amended Bridge Loan pursuant to the Bridge
               Loan Participation Agreement relating thereto, shall be issued,
               in lieu of cash payment on account of her participation in the
               principal amount of $50,000 in the Amended Bridge Loan, 35,714
               shares of OptiCare New Preferred Stock, plus additional shares of
               New Preferred Stock for accumulated interest.

                       2.12. OptiCare agrees to submit to its shareholders at
               the next shareholders' meeting, if not already approved as part
               of the Shareholder Proposals, an Amendment to the Performance
               Stock Program to provide 10% of the fully diluted shares of
               Common Stock, Preferred Stock and

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               Warrants outstanding to be issued to OptiCare's key employees and
               directors and to extend the date thereof to December 31, 2006.
               Palisade agrees to vote its stock and the proxies entitling it to
               vote for approval of such amendment.

                       2.13. Palisade and Dr. Yimoyines on the one hand, and
               OptiCare on the other, shall, as of the Effective Date, enter
               into a Registration Rights Agreement regarding the Common Stock
               of OptiCare currently held by Palisade, the Common Stock issuable
               pursuant to warrants currently held by Palisade and Dr.
               Yimoyines, and the Common Stock of OptiCare issuable as a result
               of any conversion of the New Preferred Stock or on the exercise
               of any of the Warrants issued to Palisade and to Dr. Yimoyines
               pursuant to this Agreement.

                       2.14 OptiCare shall, on the Effective Date, obtain and
               deliver the resignations of three (3) directors of its Board of
               Directors.

                       2.15 OptiCare shall, as of the Effective Date, amend its
               Bylaws to include the provisions set forth in "Schedule 2.15".

                       2.16 On the Effective Date, OptiCare shall pay to Norman
               Drubner, Trustee of the OptiCare D&O Tail Policy Trust (the "Tail
               Policy Trust"), the sum of $225,000 to be held under and for the
               purposes of the Tail Policy Trust. A copy of the Trust Agreement
               of the Tail Policy Trust is annexed as "Schedule 2.16". OptiCare
               agrees to execute such Trust Agreement on the Effective Date."

       7. The first sentence of Section 4.A.2 is amended to add "and the
Palisade Note and the Yimoyines Note" immediately following "the Warrants", and
to add the words "and to Dr. Yimoyines" immediately following "to Palisade."

       8. The second sentence of Section 4.A.2 is amended to add "and the
Palisade Note and the Yimoyines Note" immediately following "the Warrants"
[other than in clause (iii)], to add the words "and to Dr. Yimoyines"
immediately following "to Palisade," to add the words "(as defined therein)"
immediately

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following the words "Warrant Shares described therein," and to add a new clause
(iv) reading: "(iv) the Palisade Note and the Yimoyines Note will have been
validly issued and will represent legal, valid and binding obligations of
OptiCare enforceable in accordance with their terms."

       9. Section 4.A.4 is amended and replaced in its entirety with the
following:

          "4.A.4. Delaware GCL Section 203. The Board of Directors of OptiCare
          duly adopted resolutions approving the transactions by which Palisade
          acquired its 2,000,000 shares of OptiCare Common Stock and became an
          "interested stockholder" prior to such transactions. Such resolutions
          have not been repealed or modified as of the date hereof."

      10. Section 4.A.7 is amended by adding the words "and the Palisade Note
and the Yimoyines Note" immediately following "the Warrants" and by adding the
words, "Dr. Yimoyines" immediately following "in favor of Palisade."

      11. Section 4.A.24 is amended by replacing the reference to "Sections 1.01
to 1.23" by reference to "Sections 4.A.1 to 4.A.23" and by adding the following
new sentence:

          "Palisade shall be entitled to receive at the time of the Closing such
          officers' certificates, legal opinions or other documents as Palisade
          may reasonably request to confirm such representations."

      12. Subsection 4.B.1(f) is amended and replaced in its entirety with the
following:

          "(f) Conversion Stock. OptiCare will at all times, so long as the New
          Preferred Stock or Warrants are outstanding, reserve such authorized
          shares of Common Stock as are necessary for the full conversion or
          exercise of the New Preferred Stock and Warrants. The issuance of
          shares of such Common Stock upon conversion of the New Preferred Stock
          or exercise of the Warrants will be duly authorized by all necessary
          corporate action on the part of OptiCare and, when issued upon
          conversion of the New Preferred Stock or exercise of the Warrants in
          accordance with the terms thereof, such Common Stock will have been
          validly issued and will be fully paid and non-assessable."

      13. The definition of "Permitted Liens" in Section 4.D is amended by
adding the words "and

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G. E. Capital Corporation" immediately after the words "Dr. Bauman."

      14. Section 6.1 is amended and replaced in its entirety by the following:

          "6.1 OptiCare agrees that for so long as Palisade holds more than 50%
          of the voting power of OptiCare, (i) OptiCare's Board of Directors
          will consist of not more than five members (or such greater number as
          Palisade may reasonably request), and (ii) OptiCare shall cause such
          number of persons designated by Palisade from time to time to be
          nominated for, and elected to, the Board of Directors of OptiCare so
          that if desired by Palisade a number of directors equal to the minimum
          number necessary to constitute a majority of the Board of Directors of
          OptiCare will be persons so designated by Palisade.

      15. Section 6.2 is amended and replaced in its entirety by the following:

          "6.2 For so long as Palisade holds more than 50% of the voting power
          of OptiCare, OptiCare shall not take any of the following actions
          without the approval of a majority of its Independent Directors (as
          defined below):

                  (a) Issuance to Palisade or any affiliate of Palisade (other
          than pursuant to the terms of securities then held by Palisade) of (A)
          any new class or series of preferred stock out of the "blank check"
          preferred stock authorized by OptiCare's certificate of incorporation,
          as amended from time to time, (B) any new class or series of preferred
          stock authorized or to be authorized hereafter under an amendment of
          the certificate of incorporation of the OptiCare, or (C) any security
          convertible into or exchangeable for (with or without payment of any
          additional consideration) any of the securities described in clauses A
          or B hereof.

                  (b) For purposes of this Section 6, "Independent Director"
          means a director who qualifies as an "independent director" under Rule
          121 of the American Stock Exchange.

                  (c) No amendment of this Section 6.2 shall be made without the
          approval of the Independent Directors.

      16. Section 7 is amended and replaced in its entirety by the following:

                                                                               8
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          "7. TERMINATION. Palisade shall have the right, in its sole
          discretion, to terminate this Agreement at any time, by notice to
          OptiCare (in which case this Agreement shall cease to be of any
          further force and effect), in the event that (i) the Bank Austria
          Contingency is not satisfied in Palisade's sole discretion, (ii) the
          Bank Austria Restructure Agreement referred to in Paragraph 2.8
          terminates in accordance with its terms without the transactions
          contemplated thereby having been consummated, (iii) Capital Source
          advises Palisade or OptiCare that Capital Source is not prepared to
          proceed to consummate the financing described in Paragraph 2.5, or
          (iv) any of the Shareholder Proposals is disapproved by OptiCare's
          shareholders. OptiCare shall have the right, in its sole discretion,
          to terminate this Agreement at any time, by notice to Palisade (in
          which case this Agreement shall cease to be of any further force and
          effect), in the event that the Bank Austria Contingency is not
          satisfied in OptiCare's sole discretion."

      17. Section 8 is amended by deleting the last full sentence thereof.

      18. Section 9.3 is amended by replacing the words "Bergman, Horowitz &
Reynolds, P.C." with "Withers Bergman LLP," and by renumbering subsection (B) as
subsection (C), and by inserting a new subsection (B) as follows:

                   (B)    If to Dr. Yimoyines:

                          Dean J. Yimoyines, MD
                          OptiCare Eye Health Centers, Inc.
                          160 Robbins Street
                          Waterbury, CT 06708

                          With a copy to:

                          Dean J. Yimoyines, MD
                          Bristol Road
                          Middlebury, CT  06762

      19. Subsection 9.6 is amended and replaced in its entirety by the
following:

          "9.6. Jurisdiction. OptiCare, Palisade and Dr. Yimoyines each agree to
          submit to the jurisdiction of the United States District Court for the
          Southern District of New York, as well as the jurisdiction of all
          courts to which an appeal may be

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          taken from the aforesaid court for the purpose of any suit, action or
          proceeding arising out of or with respect to this Agreement or any of
          the Restructure Documents and each waives any objections they each may
          have as to venue in such courts."

      20. A new Section 9.7 is added as follows:

          "9.7. Attorney Fees and Expenses. OptiCare shall reimburse Palisade
          for all reasonable out-of-pocket expenses including fees and
          disbursements of its counsel in connection with this Restructure
          Agreement and the closing of the transactions contemplated hereby."

      21. The rights, privileges, duties and obligations of the parties under
the Restructure Agreement shall, except as modified above, remain unchanged and
in full force and effect.

                                                                              10
<PAGE>

       IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the day and year first written above.

Signed, Sealed and Delivered            PALISADE CONCENTRATED EQUITY
in the Presence of:                     PARTNERSHIP, L.P.

                                        By: Palisade Concentrated Holdings LLC,
                                        its General Partner
----------------------------------

----------------------------------      By: /s/ Mark S. Hoffman
                                           -------------------------------------
                                              Name: Mark S. Hoffman
                                              Title: Member

/s/ Robert A. Fisher
----------------------------------

/s/ Wendy S. Arrington                  /s/ Dean J. Yimoyines
----------------------------------      ----------------------------------------
                                        Dean J. Yimoyines

/s/ Robert A. Fisher
----------------------------------      OPTICARE HEALTH SYSTEMS, INC.

/s/ Wendy S. Arrington
----------------------------------      By: /s/ William A. Blaskiewicz
                                           -------------------------------------
                                              Name: William A. Blaskiewicz
                                              Title: CFO/VP

                                                                              11<PAGE>

                    SECOND AMENDMENT TO RESTRUCTURE AGREEMENT

       THIS SECOND AMENDMENT is made as of the 22nd day of January 2002 by and
among PALISADE CONCENTRATED EQUITY PARTNERSHIP, L.P. ("Palisade"), DEAN J.
YIMOYINES ("Dr. Yimoyines") and OPTICARE HEALTH SYSTEMS, INC. ("OptiCare").

                               W I T N E S S E T H

       WHEREAS, OptiCare, Palisade and Dr. Yimoyines entered into a certain
Restructure Agreement dated the 17th day of December 2001, amended pursuant to a
First Amendment to Restructure Agreement dated as of the 5th day of January 2002
(collectively, the "Restructure Agreement"), which provided, among other things,
for the contemplation of a settlement and contingency for the settlement with
Bank Austria Creditanstalt Corporate Finance, Inc. as agent for the lenders
("Bank Austria Contingency").

       WHEREAS, CapitalSource Finance, LLC ("CapitalSource") may acquire the
loans due from OptiCare to Bank Austria and all loan documents in connection
with the loan from Bank Austria. This Amendment is made to contemplate that
CapitalSource may acquire such loans and loan documents.

       NOW, THEREFORE, the parties hereto agree to amend the Restructure
Agreement as follows:

       1. The definition of "Bank Austria" shall include its successors and
assigns, including without limitation CapitalSource Finance, LLC. The term "Bank
Austria Contingency" shall include entering into definitive agreements with Bank
Austria, its successors and assigns acceptable to Palisade.

       2. Paragraph D of the Section entitled "Background" is amended to replace
the words "to repay Bank Austria its debt" with the words "to repay to Bank
Austria or its assigns it debt".

       3. Paragraph F of the Section entitled "Background" is amended and
restated in its entirety as follows:

                 "Palisade proposes to provide the investment and loan described
          herein in order to allow OptiCare to, among other things, purchase
          certain physician notes and related assets from Bank Austria for a
          purchase price of $1,350,000, and to make certain payments which will
          permit the purchase by CapitalSource of the Bank Austria debt."

       4. Section 2.5 is amended and restated in its entirety to state:
"CapitalSource shall purchase the Bank Austria Loan."

       5. Section 2.8 is amended and restated in its entirety as follows:

                 "2.8. OptiCare will use a portion of the proceeds of the loans
          from Palisade and Dr. Yimoyines and the stock investments by Palisade
          and Dr. Yimoyines to make a principal payment to CapitalSource,
          subject to CapitalSource's purchase of the Bank Austria debt, after
          giving effect to Bank Austria's the partial forgiveness of the amount
          due

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          Bank Austria, and, in addition, to cancel a certain letter of credit,
          to repurchase certain stock and warrants of OptiCare and/or its
          subsidiaries that are presently owned by Bank Austria, and to acquire
          certain assets of Bank Austria pursuant to an agreement to be entered
          into by OptiCare and Bank Austria (which shall be acceptable to
          Palisade in its sole discretion)."

       6. Paragraph 7 is amended and restated in its entirety as follows:

                 "7. TERMINATION. Palisade shall have the right, in its sole
          discretion, to terminate this Agreement at any time by notice to
          OptiCare (in which case this Agreement shall cease to be of any
          further force and effect), in the event that (i) the Bank Austria
          Contingency is not satisfied in Palisade's sole discretion, (ii)
          CapitalSource advises Palisade or OptiCare that CapitalSource is not
          prepared to proceed to consummate the financing described herein, or
          (iii) any of the Shareholder Proposals is disapproved by OptiCare's
          shareholders. OptiCare shall have the right, in its sole discretion,
          to terminate this Agreement at any time, by notice to Palisade (in
          which case this Agreement shall cease to be of any further force and
          effect) in the event that the Bank Austria Contingency is not
          satisfied in OptiCare's sole discretion."

       7. As amended hereunder, the rights, privileges, duties and obligations
of the parties under the Restructure Agreement shall remain unchanged and in
full force and effect.

       IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the day and year first written above.

Signed, Sealed and Delivered            PALISADE CONCENTRATED EQUITY
in the Presence of:                     PARTNERSHIP, L.P.

                                        By: Palisade Concentrated Holdings LLC,
                                        its General Partner
----------------------------------

----------------------------------      By: /s/ Mark S. Hoffman
                                           -------------------------------------

----------------------------------

                                        /s/ Dean J. Yimoyines
----------------------------------      ----------------------------------------
                                        Dean J. Yimoyines

<PAGE>

----------------------------------      OPTICARE HEALTH SYSTEMS, INC.

----------------------------------      By: /s/ William A. Blaskiewicz
                                           -------------------------------------
                                              Name: William A. Blaskiewicz
                                              Title: CFO/VP

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