Document:

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                             SUBORDINATED PLEDGE AND
                               SECURITY AGREEMENT

         SUBORDINATED PLEDGE AND SECURITY AGREEMENT dated as of January 25,
2002, by OptiCare Health Systems, Inc. (the "Company") and each of the other
grantors listed on the signature pages hereof (each a "Grantor" and,
collectively, the "Grantors"), in favor of Palisade Concentrated Equity
Partnership, L.P. ("Palisade"), as collateral agent for the Secured Parties (as
hereinafter defined) (in such capacity, the "Collateral Agent").

                              W I T N E S S E T H:

         WHEREAS, pursuant to a certain Restructure Agreement dated as of
December 17, 2001, as amended, among the Company, Palisade and Dr. Dean J.
Yimoyines, M.D. ("Dr. Yimoyines") (as the same has been and may be further
amended, restated, supplemented or otherwise modified from time to time, the
"Restructure Agreement"), the Secured Parties have agreed to make subordinated
loans to the Company in an aggregate principal amount of $14,000,000, such loans
to be evidenced by Senior Subordinated Secured Notes dated January ___, 2002 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the "Notes") issued by the Company in favor of the Secured Parties,
upon the terms and subject to the conditions set forth therein;

         WHEREAS, the Grantors, other than Company, are subsidiaries of Company
and will derive certain benefits from the Secured Parties making the loans to
the Company under the Restructure Agreement;

         NOW, THEREFORE, in consideration of the premises and to induce the
Secured Parties to make the loans to the Company under the Restructure
Agreement, each Grantor hereby agrees with the Collateral Agent, for the benefit
of the Secured Parties, as follows:

         ARTICLE I. DEFINED TERMS

         SECTION 1.1 DEFINITIONS.

         (a) Unless otherwise defined herein, terms defined in the Restructure
Agreement and used herein have the meanings given to them in the Restructure
Agreement.

         (b) Terms used herein that are defined in the UCC have the meanings
given to them in the UCC, including the terms "Accounts", "Chattel Paper",
"Documents", "Equipment", "General Intangibles", "Instruments", "Inventory",
"Payment Intangible", "Proceeds", "Security", "Securities Account", "Securities
Intermediary" and "Security Entitlement".

         (c) The following additional terms shall have the following meanings:

         "Agreement" means this Subordinated Pledge and Security Agreement.

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         "CapitalSource" means Capital Source Finance, LLC.

         "CapitalSource Loan Agreement" means the Amended and Restated Revolving
Credit, Term Loan and Security Agreement, dated as of January ___, 2002, among
CapitalSource, the Company and the other Grantors.

         "Collateral" has the meaning specified in Section 2.1.

         "Event of Default" means any Event of Default as defined in the Notes.

         "Lien" has the meaning specified in the CapitalSource Loan Agreement.

         "Obligations" shall mean all amounts owing by the Company to the
Secured Parties, and any of their assignees, pursuant to the Notes, this
Agreement or the other Transaction Documents, including, without limitation, all
principal, interest, fees, expenses, attorneys' fees and any other sum
chargeable to Company under the Notes or any of the other Transaction Documents.

         "Permitted Encumbrances" has the meaning specified in the CapitalSource
Loan Agreement.

         "Pledged Collateral" means, collectively, the Pledged Notes, the
Pledged Stock, all certificates or other instruments representing any of the
foregoing and all Security Entitlements of any Grantor in respect of any of the
foregoing. Pledged Collateral may be General Intangibles or Investment Property.

         "Pledged Notes" means all right, title and interest of any Grantor in
the Instruments evidencing all Indebtedness owed to such Grantor, including all
Indebtedness described on Schedule 2, issued by the obligors named therein.

         "Pledged Stock" means the shares of capital stock owned by each
Grantor, including all shares of capital stock listed on Schedule 2.

         "Secured Parties" means Palisade and Linda Yimoyines.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Subordination Agreement" means the Subordination Agreement dated as of
January ___, 2002 among the Secured Parties and CapitalSource, as such agreement
may be amended at any time or from time to time.

         "Transaction Documents" means the Restructure Agreement, the Notes, the
Subordination Agreement and this Agreement and any attachments, exhibits or
annexes thereto or hereto.

         "UCC" means the Uniform Commercial Code as from time to time in effect
in the State of New York; provided, however, that in the event that, by reason
of mandatory provisions of law, any or all of the attachment, perfection or
priority of the Collateral Agent's security

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interest in any Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the State of New York, the term "UCC" shall
mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such provisions.

         "Vehicles" means all vehicles covered by a certificate of title law of
any state.

         SECTION 1.2 CERTAIN OTHER TERMS.

         (a) The words "herein," "hereof," "hereto" and "hereunder" and similar
words refer to this Agreement as a whole and not to any particular Article,
Section, subsection or clause in this Agreement.

         (b) References herein to an Annex, Schedule, Article, Section,
subsection or clause refer to the appropriate Annex or Schedule to, or Article,
Section, subsection or clause in this Agreement.

         (c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

         (d) Where the context requires, provisions relating to the Collateral
or any part thereof, when used in relation to a Grantor, shall refer to such
Grantor's Collateral or the relevant part thereof.

         (e) Any reference in this Agreement to a Transaction Document shall
include all appendices, exhibits and schedules thereto, and, unless specifically
stated otherwise all amendments, restatements, supplements or other
modifications thereto, and as the same may be in effect at any and all times
such reference becomes operative.

         (f) The term "including" means "including without limitation" except
when used in the computation of time periods.

         (g) The terms "Collateral Agent" and "Secured Parties" includes their
respective successors.

         (h) References in this Agreement to any statute shall be to such
statute as amended or modified and in effect from time to time.

         ARTICLE II. SECURITY INTEREST

         SECTION 2.1 GRANT OF SECURITY INTEREST. (a) To secure the payment and
performance of the Obligations, each Grantor hereby grants to the Collateral
Agent, for the benefit of the Secured Parties, a continuing security interest in
and lien upon, and pledges to Collateral Agent, for the benefit of the Secured
Parties, all of its right, title and interest in and to the following
(collectively and each individually, the "Collateral"):

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              (i) all of such Grantor's tangible personal property, including
without limitation all present and future Inventory and Equipment (including
items of equipment which are or become Fixtures), now owned or hereafter
acquired;

              (ii) all of such Grantor's intangible personal property, including
without limitation all present and future Accounts, securities, contract rights,
Permits, General Intangibles, Chattel Paper, Documents, Instruments and Deposit
Accounts, rights to the payment of money or other forms of consideration of any
kind, tax refunds, insurance proceeds, now owned or hereafter acquired, and all
intangible and tangible personal property relating to or arising out of any of
the foregoing;

              (iii) all of such Grantor's present and future Government
Contracts and rights thereunder and the related Government Accounts and proceeds
thereof, now or hereafter owned or acquired by such Grantor; provided, however,
that the Collateral Agent shall not have a security interest in any rights under
any Government Contract of such Grantor or in the related Government Account
where the taking of such security interest would be a violation of an express
prohibition contained in the Government Contract (for purposes of this
limitation, the fact that a Government Contract is subject to, or otherwise
refers to, Title 31, ss. 203 or Title 41, ss. 15 of the United States Code shall
not be deemed an express prohibition against assignment thereof) or is
prohibited by applicable law; and

              (iv) any and all additions to any of the foregoing, and any and
all replacements, products and proceeds (including insurance proceeds) of any of
the foregoing.

         (b) Notwithstanding the preceding paragraph (a), such grant of a
security interest shall not extend to, and the term "Collateral" shall not
include, any General Intangibles of any Grantor to the extent that (i) such
General Intangibles are not assignable or capable of being encumbered as a
matter of law or under the terms of any license or other agreement applicable
thereto (but solely to the extent that any such restriction shall be enforceable
under applicable law) without the consent of the licensor thereof or other
applicable party thereto, and (ii) such consent has not been obtained; provided,
however, that the foregoing grant of a security interest shall extend to, and
the term "Collateral" shall include, each of the following: (a) any General
Intangible which is in the nature of an Account or a right to the payment of
money or a proceed of, or otherwise related to the enforcement or collection of,
any Account or right to the payment of money, or goods which are the subject of
any Account or right to the payment of money, (b) any and all proceeds of any
General Intangible that is otherwise excluded to the extent that the assignment,
pledge or encumbrance of such proceeds is not so restricted, and (c) upon
obtaining the consent of any such licensor or other applicable party with
respect to any such otherwise excluded General Intangible, such General
Intangible as well as any and all proceeds thereof that might theretofore have
been excluded from such grant of a security interest and from the term
"Collateral."

         (d) Upon the execution and delivery of this Agreement, and upon the
proper filing of the necessary financing statements and proper delivery of the
necessary stock certificates, without any further action, the Collateral Agent
will have a good, valid and perfected priority Lien and security interest in the
Collateral, subject to no transfer or other restrictions or Liens of any kind in
favor of any other Person except for Permitted Liens and Liens in favor of

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CapitalSource. No financing statement relating to any of the Collateral is on
file in any public office except those (i) on behalf of the Collateral Agent,
(ii) in favor of CapitalSource or its predecessor, Bank Austria, and/or (iii) in
connection with Permitted Liens.

         SECTION 2.2 COLLATERAL ADMINISTRATION.

         (a) Subject to the prior rights of CapitalSource pursuant to
CapitalSource Loan Agreement and Subordination Agreement, all Collateral (except
Deposit Accounts) will at all times be kept by the applicable Grantor at the
locations set forth on Schedule 5.18 to the CapitalSource Loan Agreement and
shall not, without thirty (30) calendar days prior written notice to the
Collateral Agent, be moved therefrom, and in any case shall not be moved outside
the continental United States.

         (b) The Grantors shall keep accurate and complete records of their
Accounts and all payments and collections thereon and shall submit such records
to the Collateral Agent on such periodic bases as the Collateral Agent may
request. If requested by the Collateral Agent after an Event of Default, the
Grantors Lender shall execute and deliver to the Collateral Agent formal written
assignments of all of their Accounts weekly or daily as the Collateral Agent may
request, including all Accounts created since the date of the last assignment,
together with copies of claims, invoices and/or other information related
thereto.

         (c) Whether or not an Event of Default has occurred, any of the
Collateral Agent's officers, employees, representatives or agents shall have the
right, at any time during normal business hours, in the name of the Collateral
Agent, or any designee of the Collateral Agent, to verify the validity, amount
or any other matter relating to any Accounts of the Grantors. The Grantors shall
cooperate fully with the Collateral Agent in an effort to facilitate and
promptly conclude such verification process.

         (d) To expedite collection, the Grantors shall endeavor in the first
instance to make collection of their Accounts for the Collateral Agent. Subject
to the rights of CapitalSource under the CapitalSource Loan Agreement and the
Subordination Agreement, the Collateral Agent shall have the right, at all times
after the occurrence of an Event of Default to notify (i) Account Debtors owing
Accounts to the Grantors other than Medicaid/Medicare Account Debtors that their
Accounts have been assigned to the Collateral Agent and to collect such Accounts
directly in its own name and to charge collection costs and expenses, including
reasonable attorney's fees, to the Grantors, and (ii) Medicaid/Medicare Account
Debtors that any Grantor has waived any and all defenses and counterclaims it
may have or could interpose in any such action or procedure brought by the
Collateral Agent to obtain a court order recognizing the assignment or security
interest and lien of the Collateral Agent in and to any Account or other
Collateral and that the Collateral Agent is seeking or may seek to obtain a
court order recognizing the assignment or security interest and lien of the
Collateral Agent in and to all Accounts and other Collateral payable by
Medicaid/Medicare Account Debtors.

         (e) As and when determined by the Collateral Agent in its reasonable
discretion, the Collateral Agent will perform the searches described in clauses
(i) and (ii) below against the Grantors (the results of which are to be
consistent with the Grantors' representations and warranties under this
Agreement), all at the Company's expense: (i) UCC searches with the

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Secretary of State and local filing offices of each jurisdiction where the
Company and/or any other Grantor is incorporated or organized or maintains its
executive offices, a place of business or assets; and (ii) judgment, federal tax
lien and corporate and partnership tax lien searches, in each jurisdiction
searched under clause (i) below.

         (f) Subject to the prior rights of CapitalSource under the
CapitalSource Loan Agreement and the Subordination Agreement, upon the
Collateral Agent's request after an Event of Default shall have occurred and be
continuing, the Grantors (i) shall provide prompt written notice to each Account
Debtor (other than Medicaid/Medicare Account Debtors) that the Collateral Agent
has been granted a lien and security interest in, upon and to all Accounts
applicable to such Account Debtor and shall direct each Account Debtor to make
payments to a lockbox account under the control and dominion of the Collateral
Agent or its representative, and each Grantor hereby authorizes the Collateral
Agent, upon any failure by any Grantor to send such notices and directions
within ten (10) calendar days after the Collateral Agent's request, to send any
and all similar notices and directions to such Account Debtors, and (ii) shall
do anything further that may be lawfully required by the Collateral Agent to
secure the Collateral Agent and effectuate the intentions of this Agreement. At
the Collateral Agent's request, each Grantor shall immediately deliver to the
Collateral Agent or its representative all items for which the Collateral Agent
or its representative must receive possession to obtain a perfected security
interest and all notes, certificates, and documents of title, chattel paper,
warehouse receipts, instruments, and any other similar instruments constituting
Collateral.

         SECTION 2.3 SUBORDINATION AGREEMENT. Notwithstanding anything to the
contrary herein contained, the lien and security interest granted to the
Collateral Agent in this Agreement shall be subject to the terms and conditions
of the Subordination Agreement.

         ARTICLE III. REPRESENTATIONS AND WARRANTIES

         Each Grantor hereby represents and warrants to the Collateral Agent and
the Secured Parties that:

         SECTION 3.1 TITLE; NO OTHER LIENS. Except for the Lien granted to the
Collateral Agent pursuant to this Agreement and the other Liens permitted to
exist on the Collateral under the Transaction Documents and the CapitalSource
Loan Agreement, such Grantor is the record and beneficial owner of the Pledged
Collateral pledged by it hereunder constituting Instruments or certificated
securities, is the entitlement holder of all such Pledged Collateral
constituting Investment Property and has rights in or the power to transfer each
other item of Collateral in which a Lien is granted by it hereunder, free and
clear of any and all Liens.

         SECTION 3.2 PERFECTION AND PRIORITY. The security interest granted
pursuant to this Agreement will constitute a valid and continuing perfected
security interest in favor of the Collateral Agent in the Collateral for which
perfection is governed by the UCC or filing with the United States Patent and
Trademark Office upon (i) the completion of the filings and other actions
specified on Schedule 3 (which, in the case of all filings and other documents
referred to on such schedule, have been delivered to the Collateral Agent in
completed and duly executed form), (ii) the delivery to the Collateral Agent or
its bailee of all Collateral consisting of Instruments and certificated
securities, in each case properly endorsed for transfer to the

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Collateral Agent or in blank, or the execution of Control Account Agreements
with respect to Investment Property not in certificated form, and (iii) all
appropriate filings having been made with the United States Patent and Trademark
Office. Such security interest will be prior to all other Liens on the
Collateral, except for Liens in favor of CapitalSource and other Permitted
Liens.

         SECTION 3.3 STATE OF INCORPORATION; CHIEF EXECUTIVE OFFICE. On the date
hereof, such Grantor's jurisdiction of organization, organizational
identification number, if any, and the location of such Grantor's chief
executive office or sole place of business is specified on Schedule 3.3.

         SECTION 3.4 INVENTORY AND EQUIPMENT. On the date hereof, such Grantor's
Inventory and Equipment (other than mobile goods and Inventory or Equipment in
transit) are kept at the locations listed on Schedule 3.4.

         SECTION 3.5 PLEDGED COLLATERAL.

         (a) The Pledged Stock pledged hereunder by such Grantor are listed on
Schedule 3.5 and constitute that percentage of the issued and outstanding equity
of all classes of each issuer thereof as set forth on Schedule 3.5.

         (b) All of the Pledged Stock has been duly and validly issued and are
fully paid and nonassessable.

         (c) Each of the Pledged Notes constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, and general equitable principles (whether
considered in a proceeding in equity or at law).

         (d) All Pledged Collateral consisting of certificated securities or
Instruments has been delivered to the Collateral Agent or its bailee in
accordance with Section 4.4(a).

         (e) There is no Pledged Collateral other than that represented by
certificated securities or Instruments in the possession of the Collateral
Agent.

         SECTION 3.6 ACCOUNTS. No amount payable to such Grantor under or in
connection with any Account is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Collateral Agent or its bailee, properly
endorsed for transfer, to the extent delivery is required by Section 4.4.

         SECTION 3.7 NO OTHER NAMES. Except as set forth on Schedule 3.7, within
the five-year period preceding the date hereof such Grantor has not had, or
operated in any jurisdiction, under any trade name, fictitious name or other
name other than its current legal name.

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         SECTION 3.8 DEPOSIT ACCOUNTS; CONTROL ACCOUNTS. The only Deposit
Accounts or Securities Accounts maintained by any Grantor on the date hereof are
those listed on Schedule 3.8, which sets forth such information separately for
each Grantor.

         SECTION 3.9 OTHER FINANCING STATEMENTS. There are no financing
statements (or similar statement or instrument of registration under the law of
any jurisdiction) covering or purporting to cover any interest of any kind in
the Collateral except as disclosed on Schedule 3.9.

         ARTICLE IV. COVENANTS

         As long as the Note remains outstanding, unless the Collateral Agent
otherwise consents in writing, each Grantor agrees with the Collateral Agent
that:

         SECTION 4.1 GENERALLY. Such Grantor shall (a) except for the security
interest created by this Agreement and other Permitted Liens and except as
permitted by the Notes, not create or permit to exist any Lien upon or with
respect to any of the Collateral; (b) not use or permit any Collateral to be
used unlawfully or in violation of any provision of this Agreement, the
CapitalSource Loan Agreement, any other Transaction Document, any applicable law
or any policy of insurance covering the Collateral; (c) not sell, transfer or
assign (by operation of law or otherwise) any Collateral, if such sale, transfer
or assignment is prohibited by the Notes or other Transaction Documents; (d) not
enter into any agreement or undertaking restricting the right or ability of such
Grantor or the Collateral Agent to sell, assign or transfer any of the
Collateral if such restriction would have a Material Adverse Effect, except as
permitted by the Transaction Documents; and (e) promptly notify the Collateral
Agent of its entry into any agreement or assumption of undertaking that
restricts the ability to sell, assign or transfer any of the Collateral
regardless of whether or not it has a Material Adverse Effect.

         SECTION 4.2 MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER
DOCUMENTATION.

         (a) Except as provided by the Transaction Documents, such Grantor will
maintain the security interest created by this Agreement as a perfected security
interest having at least the priority described in Section 3.2 and shall defend
such security interest against the claims and demands of all Persons.

         (b) Such Grantor will furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Collateral Agent may
reasonably request, all in reasonable detail.

         (c) At any time and from time to time, upon the written request of the
Collateral Agent, and at the sole expense of the Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further action as the Collateral Agent
may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including the filing of any financing or continuation statement under the UCC
(or other similar

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laws) in effect in any jurisdiction with respect to the security interest
created hereby and the execution and delivery of Control Agreements.

         SECTION 4.3 CHANGES IN LOCATIONS, NAME, ETC.

         (a) Except upon fifteen (15) days' prior written notice to the
Collateral Agent and delivery to the Collateral Agent of (i) all additional
executed financing statements and other documents reasonably requested by the
Collateral Agent to maintain the validity, perfection and priority of the
security interests provided for herein and (ii) if applicable, a written
supplement to Schedule 3.4 showing any additional location at which Inventory or
Equipment shall be kept, such Grantor will not:

         (i) change its state of incorporation or the location of its chief
    executive office from that referred to in Section 3.3; or

         (ii) change its name, identity or corporate structure to such an extent
    that any financing statement filed in connection with this Agreement would
    become misleading.

         (b) Such Grantor will keep and maintain at its own cost and expense
satisfactory and complete records of the Collateral, including a record of all
payments received and all credits granted with respect to the Collateral and all
other dealings with the Collateral. If requested by the Collateral Agent, the
security interest of the Collateral Agent shall be noted on the certificate of
title of each Vehicle.

         SECTION 4.4 PLEDGED COLLATERAL.

         (a) Such Grantor will (i) deliver to the Collateral Agent or its
bailee, all certificates and Instruments representing or evidencing any Pledged
Collateral, whether now existing or hereafter acquired, in suitable form for
transfer by delivery or, as applicable, accompanied by such Grantor's
endorsement, where necessary, or duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Collateral
Agent and (ii) maintain all other Pledged Collateral constituting Investment
Property in a Control Account. Subject to the rights of CapitalSource under the
CapitalSource Loan Agreement and the Subordination Agreement, the Collateral
Agent shall have the right, at any time in its discretion and without notice to
the Grantor, to transfer to or to register in its name or in the name of its
nominees any or all of the Pledged Collateral. The Collateral Agent or its
bailee shall have the right at any time to exchange certificates or instruments
representing or evidencing any of the Pledged Collateral for certificates or
instruments of smaller or larger denominations.

         (b) Except as provided in Article V, such Grantor shall be entitled to
receive all cash dividends paid in respect of the Pledged Collateral (other than
liquidating or distributing dividends) with respect to the Pledged Collateral.
Any sums paid upon or in respect of any of the Pledged Collateral upon the
liquidation or dissolution of any issuer of any of the Pledged Collateral, any
distribution of capital made on or in respect of any of the Pledged Collateral
or any property distributed upon or with respect to any of the Pledged
Collateral pursuant to the recapitalization or reclassification of the capital
of any issuer of Pledged Collateral or pursuant to the reorganization thereof
shall, unless otherwise subject to a perfected security interest in favor of the
Collateral Agent, be delivered to the Collateral Agent to be held by it
hereunder as

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additional collateral security for the Secured Obligations. If any sums of money
or property so paid or distributed in respect of any of the Pledged Collateral
shall be received by such Grantor, such Grantor shall, until such money or
property is paid or delivered to the Collateral Agent, hold such money or
property in trust for the Collateral Agent, segregated from other funds of such
Grantor, as additional security for the Secured Obligations.

         (c) Except as provided in Article V, such Grantor will be entitled to
exercise all voting, consent and corporate rights with respect to the Pledged
Collateral; provided, however, that no vote shall be cast, consent given or
right exercised or other action taken by such Grantor which would impair the
Collateral or which would be inconsistent with or result in any violation of any
provision of the Restructure Agreement, this Agreement or any other Transaction
Document or, without prior notice to the Collateral Agent, to enable or take any
other action to permit any issuer of Pledged Collateral to issue any stock or
other equity securities of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any stock or
other equity securities of any nature of any issuer of Pledged Collateral.

         (d) Such Grantor shall not grant control over any Investment Property
to any Person other than CapitalSource or the Collateral Agent, except as
permitted pursuant to the Transaction Documents.

         (e) In the case of each Grantor which is an issuer of Pledged
Collateral, such Grantor agrees to be bound by the terms of this Agreement
relating to the Pledged Collateral issued by it and will comply with such terms
insofar as such terms are applicable to it.

         SECTION 4.5 ACCOUNTS.

         (a) Such Grantor will not, other than in the ordinary course of
business consistent with its past practice, (i) grant any extension of the time
of payment of any Account, (ii) compromise or settle any Account for less than
the full amount thereof, (iii) release, wholly or partially, any Person liable
for the payment of any Account, (iv) allow any credit or discount on any
Account, or (v) amend, supplement or modify any Account in any manner that could
adversely affect the value thereof.

         (b) The Collateral Agent shall have the right to make test
verifications of the Accounts in any manner and through any medium that it
reasonably considers advisable, and such Grantor shall furnish all such
assistance and information as the Collateral Agent may reasonably require in
connection therewith. At any time and from time to time, upon the Collateral
Agent's request and at the expense of the relevant Grantor, such Grantor shall
cause independent public accountants or others satisfactory to the Collateral
Agent to furnish to the Collateral Agent reports showing reconciliations, aging
and test verifications of, and trial balances for, the Accounts; provided,
however, that unless a Default or Event of Default shall be continuing, the
Collateral Agent shall request no more than four such reports during any
calendar year.

         SECTION 4.6 VEHICLES. Upon the request of the Collateral Agent, within
thirty (30) days after the date of such request and, with respect to any
Vehicles acquired by such

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Grantor subsequent to the date of any such request, within thirty (30) days
after the date of acquisition thereof, such Grantor shall file all applications
for certificates of title/ownership indicating the Collateral Agent's first
priority security interest in the Vehicle covered by such certificate, and any
other necessary documentation, in each office in each jurisdiction which the
Collateral Agent shall deem advisable to perfect its security interests in the
Vehicles.

         SECTION 4.7 PAYMENT OF OBLIGATIONS. Such Grantor will pay and discharge
or otherwise satisfy at or before maturity or before they become delinquent, as
the case may be, all taxes, assessments and governmental charges or levies
imposed upon the Collateral or in respect of income or profits therefrom, as
well as all claims of any kind (including claims for labor, materials and
supplies) against or with respect to the Collateral, except that no such charge
need be paid if the amount or validity thereof is currently being contested in
good faith by appropriate proceedings, reserves in conformity with GAAP with
respect thereto have been provided on the books of such Grantor and such
proceedings could not reasonably be expected to result in the sale, forfeiture
or loss of any material portion of the Collateral or any interest therein.

         SECTION 4.8 INSURANCE. Such Grantor shall cause all insurance
maintained by it pursuant to the Restructure Agreement to name the Collateral
Agent on behalf of the Secured Parties as additional insured or loss payee, as
appropriate, and to provide that no cancellation, material addition in amount or
material change in coverage shall be effective until after thirty (30) days'
written notice thereof to the Collateral Agent.

         ARTICLE V. REMEDIAL PROVISIONS

         SECTION 5.1 CODE AND OTHER REMEDIES COLLATERAL:

         (a) During the continuance of an Event of Default, subject to the
provisions of the Subordination Agreement, the Collateral Agent may exercise, in
addition to all other rights and remedies granted to it in this Agreement and in
any other instrument or agreement securing, evidencing or relating to the
Secured Obligations, all rights and remedies of a secured party under the UCC or
any other applicable law.

         (b) Without limiting the generality of Section 5.1(a), subject to the
provisions of the Subordination Agreement, upon an Event of Default, the
Collateral Agent, without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice required by law
referred to below) to or upon any Grantor or any other Person (all and each of
which demands, defenses, advertisements and notices are hereby waived), may in
such circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or office of the Collateral Agent or any Secured Party or elsewhere upon
such terms and conditions as it may deem advisable and at such prices as it may
deem best, for cash or on credit or for future delivery without assumption of
any credit risk. The Collateral Agent shall have the right upon any such public
sale or sales, and, to the extent permitted by law, upon any such private sale
or sales, to purchase the whole or any part of the Collateral so sold, free of
any right or equity of redemption in any Grantor, which right or equity is
hereby waived and

                                      -11-
<PAGE>

released. Each Grantor further agrees, at the Collateral Agent's request, to
assemble the Collateral and make it available to the Collateral Agent at places
which the Collateral Agent shall reasonably select, whether at such Grantor's
premises or elsewhere. The Collateral Agent shall apply the net proceeds of any
action taken by it pursuant to this Section 5.1, after deducting all reasonable
costs and expenses of every kind incurred in connection therewith or incidental
to the care or safekeeping of any of the Collateral or in any way relating to
the Collateral or the rights of the Collateral Agent and any Secured Party,
including reasonable attorneys' fees and disbursements, to the payment in whole
or in part of the Secured Obligations, in such order as the Transaction
Documents shall prescribe, and only after such application and after the payment
by the Collateral Agent of any other amount required by any provision of law,
need the Collateral Agent account for the surplus, if any, to any Grantor. To
the extent permitted by applicable law, each Grantor waives all claims, damages
and demands it may acquire against the Collateral Agent or any Secured Party
arising out of the exercise by them of any rights hereunder. If any notice of a
proposed sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least 10 days before
such sale or other disposition.

         SECTION 5.2 ACCOUNTS AND PAYMENTS IN RESPECT OF GENERAL INTANGIBLES.

         (a) Subject to the rights of CapitalSource under the CapitalSource Loan
Agreement and the Subordination Agreement, if required by the Collateral Agent
at any time during the continuance of an Event of Default, any payments of
Accounts or payments in respect of General Intangibles, when collected by any
Grantor, shall be forthwith (and, in any event, within two Business Days)
deposited by such Grantor in the exact form received, duly indorsed by such
Grantor to the Collateral Agent if required, in a Cash Collateral Account,
subject to withdrawal by the Collateral Agent as provided in Section 5.4. Until
so turned over, such payments shall be held by such Grantor in trust for the
Collateral Agent, segregated from other funds of such Grantor. Each such deposit
of Proceeds of Accounts and payments in respect of General Intangibles shall be
accompanied by a report identifying in reasonable detail the nature and source
of the payments included in the deposit.

         (b) Subject to the rights of CapitalSource under the CapitalSource Loan
Agreement and the Subordination Agreement, at the Collateral Agent's request,
during the continuance of an Event of Default, each Grantor shall deliver to the
Collateral Agent all original and other documents evidencing, and relating to,
the agreements and transactions which gave rise to the Accounts or payments in
respect of General Intangibles, including all original orders, invoices and
shipping receipts.

         (c) The Collateral Agent may, without notice, at any time during the
continuance of an Event of Default, limit or terminate the authority of a
Grantor to collect its Accounts or amounts due under General Intangibles or any
thereof.

         (d) Subject to the rights of CapitalSource under the CapitalSource Loan
Agreement and the Subordination Agreement, the Collateral Agent in its own name
or in the name of others may at any time during the continuance of an Event of
Default communicate with Account Debtors to verify with them to the Collateral
Agent's satisfaction the existence, amount and terms of any Accounts or amounts
due under any General Intangibles.

                                      -12-
<PAGE>

         (e) Subject to the rights of CapitalSource under the CapitalSource Loan
Agreement and the Subordination Agreement, upon the request of the Collateral
Agent at any time during the continuance of an Event of Default, each Grantor
shall notify Account Debtors that the Accounts or General Intangibles have been
collaterally assigned to the Collateral Agent and that payments in respect
thereof shall be made directly to the Collateral Agent. In addition, the
Collateral Agent may at any time during the continuance of an Event of Default
enforce such Grantor's rights against such Account Debtors and obligors of
General Intangibles.

         (f) Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under each of the Accounts and payments in respect of General
Intangibles to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise thereto. Neither the Collateral Agent nor any Secured
Party shall have any obligation or liability under any agreement giving rise to
an Account or a payment in respect of a General Intangible by reason of or
arising out of this Agreement or the receipt by the Collateral Agent nor any
Secured Party of any payment relating thereto, nor shall the Collateral Agent
nor any Secured Party be obligated in any manner to perform any of the
obligations of any Grantor under or pursuant to any agreement giving rise to an
Account or a payment in respect of a General Intangible, to make any payment, to
make any inquiry as to the nature or the sufficiency of any payment received by
it or as to the sufficiency of any performance by any party thereunder, to
present or file any claim, to take any action to enforce any performance or to
collect the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.

         SECTION 5.3 PLEDGED COLLATERAL.

         (a) During the continuance of an Event of Default, subject to the
rights of CapitalSource under the CapitalSource Loan Agreement and the
Subordination Agreement, upon notice by the Collateral Agent to the relevant
Grantor or Grantors, (i) the Collateral Agent shall have the right to receive
any and all Proceeds of the Pledged Collateral and make application thereof to
the Secured Obligations, and (ii) the Collateral Agent or its nominee may
exercise (A) all voting, consent, corporate and other rights pertaining to the
Pledged Collateral at any meeting of shareholders, partners or members, as the
case may be, of the relevant issuer or issuers of Pledged Collateral or
otherwise and (B) any and all rights of conversion, exchange and subscription
and any other rights, privileges or options pertaining to the Pledged Collateral
as if it were the absolute owner thereof (including the right to exchange at its
discretion any and all of the Pledged Collateral upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of any issuer of Pledged Stock, the right to deposit and deliver any
and all of the Pledged Collateral with any committee, depositary, transfer
agent, registrar or other designated agency upon such terms and conditions as
the Collateral Agent may determine), all without liability except to account for
property actually received by it, but the Collateral Agent shall have no duty to
any Grantor to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.

         (b) In order to permit the Collateral Agent to exercise the voting and
other consensual rights which it may be entitled to exercise pursuant hereto and
to receive all dividends and other distributions which it may be entitled to
receive hereunder, (i) each Grantor shall promptly execute and deliver (or cause
to be executed and delivered) to the Collateral

                                      -13-
<PAGE>

Agent all such proxies, dividend payment orders and other instruments as the
Collateral Agent may from time to time reasonably request and (ii) without
limiting the effect of clause (i) above, such Grantor hereby grants to the
Collateral Agent an irrevocable proxy to vote all or any part of the Pledged
Collateral and to exercise all other rights, powers, privileges and remedies to
which a holder of the Pledged Collateral would be entitled (including giving or
withholding written consents of shareholders, partners or members, as the case
may be, calling special meetings of shareholders, partners or members, as the
case may be, and voting at such meetings), which proxy shall be effective,
automatically and without the necessity of any action (including any transfer of
any Pledged Collateral on the record books of the issuer thereof) by any other
Person (including the issuer of such Pledged Collateral or any officer or agent
thereof) during the continuance of an Event of Default and which proxy shall
only terminate upon the payment in full of the Obligations.

         (c) Each Grantor hereby expressly authorizes and instructs each issuer
of any Pledged Collateral pledged hereunder by such Grantor to (i) comply with
any instruction received by it from the Collateral Agent in writing that (A)
states that an Event of Default has occurred and is continuing and (B) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that such issuer
shall be fully protected in so complying and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Pledged Collateral directly to the Collateral Agent.

         SECTION 5.4 PROCEEDS TO BE TURNED OVER TO COLLATERAL AGENT. All
Proceeds received by the Collateral Agent hereunder shall be held by the
Collateral Agent in a Cash Collateral Account. All Proceeds while held by the
Collateral Agent in a Cash Collateral Account (or by such Grantor in trust for
the Collateral Agent) shall continue to be held as collateral security for the
Secured Obligations and shall not constitute payment thereof until applied to
such Secured Obligations.

         SECTION 5.5 WAIVER; DEFICIENCY. Each Grantor shall remain liable for
any deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay the Secured Obligations and the fees and
disbursements of any attorneys employed by the Collateral Agent or any Secured
Party to collect such deficiency.

         ARTICLE VI. THE COLLATERAL AGENT

         SECTION 6.1 COLLATERAL AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT.

         (a) Each Grantor hereby irrevocably constitutes and appoints the
Collateral Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, during the continuance of an Event of Default, to take any and
all appropriate action and to execute any and all documents and instruments
which may be necessary or desirable to accomplish the purposes of this
Agreement, and, without limiting the generality of the foregoing, each Grantor
hereby gives the Collateral Agent the power and right, on behalf of

                                      -14-
<PAGE>

such Grantor, without notice to or assent by such Grantor, to do any or all of
the following (in each case subject to the provisions of the Subordination
Agreement):

         (i) in the name of such Grantor or its own name, or otherwise, take
    possession of and indorse and collect any checks, drafts, notes, acceptances
    or other instruments for the payment of moneys due under any Account or
    General Intangible or with respect to any other Collateral and file any
    claim or take any other action or proceeding in any court of law or equity
    or otherwise deemed appropriate by the Collateral Agent for the purpose of
    collecting any and all such moneys due under any Account or General
    Intangible or with respect to any other Collateral whenever payable;

         (ii) in the case of any Intellectual Property, execute and deliver, and
    have recorded, any and all agreements, instruments, documents and papers as
    the Collateral Agent may request to evidence the Collateral Agent's security
    interest in such Intellectual Property and the goodwill and General
    Intangibles of such Grantor relating thereto or represented thereby;

         (iii) pay or discharge taxes and Liens levied or placed on or
    threatened against the Collateral, effect any repairs or any insurance
    called for by the terms of this Agreement and pay all or any part of the
    premiums therefor and the costs thereof;

         (iv) execute, in connection with any sale provided for in Section 5.1
    or 5.5, any endorsements, assignments or other instruments of conveyance or
    transfer with respect to the Collateral; and

         (v) (A) direct any party liable for any payment under any of the
    Collateral to make payment of any and all moneys due or to become due
    thereunder directly to the Collateral Agent or as the Collateral Agent shall
    direct; (B) ask or demand for, collect, and receive payment of and receipt
    for, any and all moneys, claims and other amounts due or to become due at
    any time in respect of or arising out of any Collateral; (C) sign and
    endorse any invoices, freight or express bills, bills of lading, storage or
    warehouse receipts, drafts against debtors, assignments, verifications,
    notices and other documents in connection with any of the Collateral; (D)
    commence and prosecute any suits, actions or proceedings at law or in equity
    in any court of competent jurisdiction to collect the Collateral or any
    portion thereof and to enforce any other right in respect of any Collateral;
    (E) defend any suit, action or proceeding brought against such Grantor with
    respect to any Collateral; (F) settle, compromise or adjust any such suit,
    action or proceeding and, in connection therewith, give such discharges or
    releases as the Collateral Agent may deem appropriate; and (G) generally,
    sell, transfer, pledge and make any agreement with respect to or otherwise
    deal with any of the Collateral as fully and completely as though the
    Collateral Agent were the absolute owner thereof for all purposes, and do,
    at the Collateral Agent's option and such Grantor's expense, at any time, or
    from time to time, all acts and things which the Collateral Agent deems
    necessary to protect, preserve or realize upon the Collateral and the
    Collateral Agent's and the Secured Parties' security interests therein and
    to effect the intent of this Agreement, all as fully and effectively as such
    Grantor might do.

                                      -15-
<PAGE>

Anything in this Section 6.1(a) to the contrary notwithstanding, the Collateral
Agent agrees that it will not exercise any rights under the power of attorney
provided for in this Section 6.1(a) unless an Event of Default shall be
continuing.

         (b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Collateral Agent, at its option, but without
any obligation so to do, may perform or comply, or otherwise cause performance
or compliance, with such agreement.

         (c) The expenses of the Collateral Agent incurred in connection with
actions undertaken as provided in this Section 6.1, together with interest
thereon at a rate per annum equal to the rate per annum at which interest would
then be payable on past due Notes, from the date of payment by the Collateral
Agent to the date reimbursed by the relevant Grantor, shall be payable by such
Grantor to the Collateral Agent on demand.

         (d) Each Grantor hereby ratifies all that said attorneys shall lawfully
do or cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.

         SECTION 6.2 DUTY OF COLLATERAL AGENT. The Collateral Agent's sole duty
with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession shall be to deal with it in the same manner as the
Collateral Agent deals with similar property for its own account. Neither the
Collateral Agent, any Collateral Agent nor any of their respective officers,
directors, employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Collateral Agent hereunder are solely to protect the Collateral
Agent's interest in the Collateral and shall not impose any duty upon the
Collateral Agent or any Collateral Agent to exercise any such powers. The
Collateral Agent and the Secured Parties shall be accountable only for amounts
that they actually receive as a result of the exercise of such powers, and
neither they nor any of their officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except for
their own gross negligence or willful misconduct.

         SECTION 6.3 EXECUTION OF FINANCING STATEMENTS. Each Grantor authorizes
the Collateral Agent to file or record financing statements and other filing or
recording documents or instruments with respect to the Collateral without the
signature of such Grantor in such form and in such offices as the Collateral
Agent reasonably determines appropriate to perfect the security interests of the
Collateral Agent under this Agreement. A photographic or other reproduction of
this Agreement shall be sufficient as a financing statement or other filing or
recording document or instrument for filing or recording in any jurisdiction.

         SECTION 6.4 AUTHORITY OF COLLATERAL AGENT. Each Grantor acknowledges
that the rights and responsibilities of the Collateral Agent under this
Agreement with respect to any action taken by the Collateral Agent or the
exercise or non-exercise by the Collateral Agent of any option, voting right,
request, judgment or other right or remedy provided for herein or

                                      -16-
<PAGE>

resulting or arising out of this Agreement shall, as between the Collateral
Agent and the Grantors, the Collateral Agent shall be conclusively presumed to
be acting as agent for the Secured Parties with full and valid authority so to
act or refrain from acting, and no Grantor shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.

         ARTICLE VII. MISCELLANEOUS

         SECTION 7.1 AMENDMENTS IN WRITING. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified except
in accordance with the Restructure Agreement.

         SECTION 7.2 NOTICES. All notices, requests and demands to or upon the
Collateral Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 9.3 of the Restructure Agreement; provided, however,
that any such notice, request or demand to or upon any Grantor shall be
addressed to such Grantor at the Company's notice address set forth below their
signature hereto.

         SECTION 7.3 NO WAIVER BY COURSE OF CONDUCT; CUMULATIVE REMEDIES.
Neither the Collateral Agent nor any Collateral Agent shall by any act (except
by a written instrument pursuant to Section 7.1), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any default or Event of Default. No failure to exercise, nor any
delay in exercising, on the part of the Collateral Agent or any Collateral
Agent, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Collateral Agent or the
Secured Parties of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy which the Collateral Agent or the
Secured Parties would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or concurrently
and are not exclusive of any other rights or remedies provided by law.

         SECTION 7.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the successors and assigns of each Grantor and shall inure to the benefit
of the Collateral Agent and each Collateral Agent and their successors and
assigns; provided, however, that no Grantor may assign, transfer or delegate any
of its rights or obligations under this Agreement without the prior written
consent of the Collateral Agent.

         SECTION 7.5 COUNTERPARTS. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same agreement.

         SECTION 7.6 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

                                      -17-
<PAGE>

         SECTION 7.7 SECTION HEADINGS. The Article and Section titles contained
in this Agreement are and shall be without substantive meaning or content of any
kind whatsoever and are not part of the agreement of the parties hereto.

         SECTION 7.8 ENTIRE AGREEMENT. This Agreement together with the other
Transaction Documents represents the entire agreement of the parties and
supersedes all prior agreements and understandings relating to the subject
matter hereof.

         SECTION 7.9 GOVERNING LAW. This agreement and the rights and
obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York without regard
to the principles thereof relating to conflict of laws.

         SECTION 7.10 RELEASE OF COLLATERAL. Upon the payment in full of all
Obligations, the Collateral shall be released from the Lien created hereby and
this Agreement and all obligations (other than those expressly stated to survive
such termination) of the Collateral Agent and each Grantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Grantors. At the
request and sole expense of any Grantor following any such termination, the
Collateral Agent shall deliver to such Grantor any Collateral of such Grantor
held by the Collateral Agent hereunder and execute and deliver to such Grantor
such documents as such Grantor shall reasonably request to evidence such
termination.

         SECTION 7.11 REINSTATEMENT. Each Grantor further agrees that, if any
payment made by any Grantor or other Person and applied to the Obligations is at
any time annulled, avoided, set aside, rescinded, invalidated, declared to be
fraudulent or preferential or otherwise required to be refunded or repaid, or
the proceeds of Collateral are required to be returned by any Collateral Agent
to such Grantor, its estate, trustee, receiver or any other party, under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or repayment, any Lien or other Collateral securing
such liability shall be and remain in full force and effect, as fully as if such
payment had never been made or, if prior thereto the Lien granted hereby or
other Collateral securing such liability hereunder shall have been released or
terminated by virtue of such cancellation or surrender), such Lien or other
Collateral shall be reinstated in full force and effect, and such prior
cancellation or surrender shall not diminish, release, discharge, impair or
otherwise affect any Lien or other Collateral securing the obligations of any
Grantor in respect of the amount of such payment.

         SECTION 7.12 CAPITALSOURCE APPOINTED REPRESENTATIVE. The Grantors, the
Collateral Agent and the Secured Parties acknowledge that CapitalSource shall
act as representative and bailee of the Collateral Agent for purposes of
maintaining possession or control of certain items of Collateral as contemplated
by this Agreement.

                                      -18-
<PAGE>

         IN WITNESS WHEREOF, each of the undersigned has caused this
Subordinated Pledge and Security Agreement to be duly executed and delivered as
of the date first above written.

                                       GRANTORS:

                                       OPTICARE HEALTH SYSTEMS, INC.

                                       By:
                                          ----------------------------------
                                          Name:
                                          Title:

                                       PRIMEVISION HEALTH, INC.

                                       By:
                                          ----------------------------------
                                          Name:
                                          Title:
                                          Address:

                                       OPTICARE EYE HEALTH CENTERS, INC.

                                       By:
                                          ----------------------------------
                                          Name:
                                          Title:
                                          Address:

ACCEPTED AND AGREED:

PALISADE CONCENTRATED EQUITY
PARTNERSHIP, L.P., as Collateral Agent

By:
   ----------------------------------
   Name:
   Title:

                                      -19-<PAGE>

                          REGISTRATION RIGHTS AGREEMENT

         THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of January 25, 2002, by and among OptiCare Health Systems,
Inc., a Delaware corporation (the "Company"), Palisade Concentrated Equity
Partnership, L.P., a Delaware limited partnership ("Palisade") and the other
Holders executing this Agreement.

                                    RECITALS

     A. The Company desires to grant to the Holders (as defined below) certain
registration rights with respect to the common stock, $.001 par value, of the
Company (the "Common Stock").

     B. The parties hereto desire to set forth the terms and conditions of the
Company's covenants and agreements in respect of the registration of the
Registerable Securities (as defined herein) with the Securities and Exchange
Commission and all applicable state securities agencies.

     C. In consideration of the premises and the mutual agreements contained
herein, the parties hereby agree as follows:

                                    AGREEMENT

1.   Definitions

     As used in this Agreement, the following capitalized terms shall have the
following meanings:

          Advice: See the last paragraph of Section 5 hereof.

          Agents: Any Person authorized to act and who acts on behalf of any
     Holder with respect to the transactions contemplated by the Agreement.

          CapitalSource: CapitalSource Finance, LLC, a Delaware limited
     liability company.

          Company Notice: See Section 4(a) hereof.

          Demand Registration: See Section 3(a) hereof.

          Dr. Yimoyines: Dr. Dean J. Yimoyines, M.D.

          Exchange Act: The Securities Exchange Act of 1934, as amended, and the
     rules and regulations thereunder, as in effect from time to time.

<PAGE>

          Holder: Each of Palisade, Linda Yimoyines and CapitalSource or any of
     their permitted transferees.

          Linda Yimoyines: Linda Yimoyines.

          Person: An individual, partnership, corporation, trust or
     unincorporated organization, or a government or agency or political
     subdivision thereof.

          Piggyback Notice: See Section 4(a) hereof.

          Piggyback Registration Statement: See Section 4(a) hereof.

          Prospectus: The prospectus included in any Registration Statement, as
     amended or supplemented by any prospectus supplement with respect to the
     terms of the offering of any portion of the Registrable Securities covered
     by the Registration Statement and all other amendments and supplements to
     the Prospectus, including post-effective amendments and all material
     incorporated by reference in such Prospectus.

          Registrable Securities: (i) All shares of Common Stock held by the
     Holders, (ii) all shares of Common Stock issuable upon conversion of any
     Series B Preferred Stock held by the Holders, (iii) all shares of Common
     Stock issuable upon exercise of any Warrants held by the Holders, and (iv)
     any securities issued or issuable with respect to the shares of Common
     Stock described in clauses (i), (ii), or (iii) of this sentence by way of a
     stock dividend or stock split or in connection with a combination of
     shares, recapitalization, merger, consolidation or other reorganization,
     until such shares of Common Stock or other securities are not Restricted
     Securities as defined in Section 2(a).

          Registration Statement: Any registration statement of the Company
     which covers Registrable Securities pursuant to the provisions of this
     Agreement, including (i) the Prospectus, (ii) amendments and supplements to
     such Registration Statement, (iii) post-effective amendments, (iv) all
     exhibits and all material incorporated by reference in such Registration
     Statement, (v) any registration statement pursuant to a Demand Registration
     and (vi) any Piggyback Registration Statement.

          Restricted Securities: The Registrable Securities upon original
     issuance thereof, subject to the provisions of Section 2(a) hereof.

          Restructure Documents: The Restructure Agreement, as amended, dated as
     of December 17, 2001 by and among the Company, Palisade and Dr. Yimoyines
     and the Revolving Credit, Term Loan and Security Agreement, dated as of
     January ___, 2002, between the Company and CapitalSource.

          Securities Act: The Securities Act of 1933, as amended, and the rules
     and regulations thereunder, as in effect from time to time.

          SEC: The Securities and Exchange Commission.

                                       2
<PAGE>

          Series B Preferred Stock: Series B 12.5% Voting Cumulative Convertible
     Participating Preferred Stock, par value $.001, of the Company.

          Underwritten Offering: The offering and sale of securities of the
     Company covered by any Registration Statement pursuant to a firm commitment
     underwriting to an underwriter at a fixed price for reoffering or pursuant
     to agency or best efforts arrangements with an underwriter.

          Warrants: Warrants issued to each of the Holders pursuant to the
     Restructure Documents.

Unless the context otherwise requires: (i) "or" is not exclusive; and (ii) words
in the singular include the plural and words in the plural include the singular.

2.   Securities Subject to this Agreement

     (a) Registrable Securities. The securities entitled to the benefits of this
Agreement are the Registrable Securities but, with respect to any particular
Registrable Security, only so long as such security continues to be a Restricted
Security. A Registrable Security ceases to be a Restricted Security when (i) it
has been effectively registered under the Securities Act and disposed of in
accordance with the Registration Statement covering it, (ii) it has been
distributed pursuant to Rules 144 or 144A (or any similar provisions then in
force) under the Securities Act or (iii) it has otherwise been transferred and a
new certificate or other evidence of ownership for it not bearing a legend
restricting transfer under the Securities Act and not subject to any stop
transfer order has been delivered by or on behalf of the Company and no other
restriction on transfer exists.

     (b) Holders of Registrable Securities. Each Holder shall be deemed to be a
holder of Registrable Securities whenever such Holder, owns or has or shares
voting control with respect to Registrable Securities or securities which are
convertible into or exercisable for Registrable Securities whether or not such
acquisition has actually been effected and disregarding any legal restrictions
upon the exercise of such right.

3.   Demand Registration

     (a) Requests for Registration. At any time after 6 months of the date of
this Agreement, Palisade may make a written request for registration with the
SEC under and in accordance with the provisions of the Securities Act of all or
part of its Registrable Securities (a "Demand Registration"). All requests made
pursuant to this Section 3(a) shall specify the number of Registrable Securities
to be registered and the intended methods of disposition thereof. All such
requests shall be delivered to the Company and the other Holders in accordance
with the provisions of Section 9(d) of this Agreement.

     (b) Number of, and Limitations on, Demand Registrations. Palisade will be
entitled to request three Demand Registrations hereunder. The Company will not
be obligated to register any Registrable Securities pursuant to such a Demand
Registration if a prior Demand Registration was declared effective within a
period commencing 12 months prior to the date of the written request for such
Demand Registration and such prior Demand Registration was

                                       3
<PAGE>

maintained effective for a period of not less than 180 days, or such shorter
period during which all Registrable Securities covered by such prior Demand
Registration were sold or withdrawn.

     (c) Selection of Underwriters. If Palisade advises the Company that any of
the Registrable Securities covered by a Demand Registration are to be sold in an
Underwritten Offering, or in a best efforts Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by Palisade and consented to by the
Company, which consent shall not be unreasonably withheld.

4.   Piggyback Registration Rights

     (a) Requests for Piggyback Registration. The Company covenants and agrees
with each Holder that in the event the Company proposes to file at any time and
from time to time after the date of this Agreement (including a filing as a
result of a Demand Registration pursuant to Section 3(a)) a registration
statement on any form for the general registration of securities under the
Securities Act with respect to the offering (other than in connection with an
offering solely to the Company's employees pursuant to a registration statement
on Form S-8 under the Securities Act or an offering pursuant to a registration
statement on Form S-4 under the Securities Act, or any successor forms thereto)
of any Common Stock of the Company (a "Piggyback Registration Statement"), then
the Company shall in each such case give written notice (a "Company Notice") of
such proposed filing to each Holder (other than any Holder initiating a Demand
Registration pursuant to Section 3) so that the Company Notice is received by
each Holder at least twenty (20) calendar days before the anticipated filing
date, and such notice shall offer to each such Holder the opportunity to include
in such Piggyback Registration Statement such number of Registrable Securities
as such Holder may request. Notwithstanding the foregoing, the Company shall not
be obligated to register the Registrable Securities of any Holder (i) unless
there shall have been received by the Company, within ten (10) calendar days of
receipt of the Company Notice by such Holder, written notice (a "Piggyback
Notice") from such Holder, which notice shall set forth the number of
Registrable Securities to be so included, or (ii) if the Company shall, within
ten (10) calendar days after receipt of a Piggyback Notice, have delivered to
any Holder whose Registrable Securities shall have been the subject of a
Piggyback Notice an opinion of counsel reasonably satisfactory to said Holder to
the effect that the proposed transfer can be made without registration in
accordance with Rule 144 under the Securities Act or any other exemption from
the registration provisions thereof (other than Rule 144A).

     The Company shall use its reasonable best efforts to cause the underwriter
of a proposed offering, if any, to permit the Holders holding Registrable
Securities requested to be included in the Piggyback Registration Statement to
include such Registrable Securities in the proposed offering on terms and
conditions at least as favorable to the Holders holding such Registrable
Securities as those offered with respect to the other securities of the Company
included therein. Notwithstanding the foregoing, if any underwriter shall advise
the Company in writing that, in its opinion, the total amount of Registrable
Securities requested to be included in such Registration Statement is so large
as to materially adversely affect the distribution of such securities, then the
Company shall include in such registration, to the extent of the total number of
Registrable Securities which the Company is so advised can be sold in (or during
the time of) such offering without having such adverse effect, first, all
Registerable Securities requested by

                                       4
<PAGE>

Palisade to be registered for its account, second, all Registerable Securities
requested to be registered by other Holders, pro rata among such other Holders,
third, all shares of Common Stock proposed to be registered for the account of
the Company, and fourth, any shares of Common Stock proposed to be registered
for the account of other stockholders of the Company.

5.   Registration Procedures

     Whenever a Holder has requested that any Registrable Securities be
registered pursuant to this Agreement, the Company will promptly take all such
actions as may be necessary or desirable to permit the sale of such Registrable
Securities in accordance with the intended method or methods of disposition
thereof, and pursuant thereto the Company will as expeditiously as possible:

     (a) with respect to a request to file a Registration Statement covering
Registrable Securities made pursuant to Section 3 hereof, use its best efforts
to prepare and file with the SEC, not later than 90 days after receipt of such
request (which 90-day period may be extended by the Company for up to an
additional 90 days if at the time of such request the Company is engaged in
negotiations looking toward its participation in a material merger, acquisition
or other form of business combination or, if by reason of such transaction, the
Company is not in a position to timely prepare and file the Registration
Statement) a Registration Statement on a form for which the Company then
qualifies which is satisfactory to the Company and the Holders (unless the
offering is made on an underwritten basis, including on a best efforts
underwriting basis, in which event the managing underwriter or underwriters
shall determine the form to be used) and which form shall be available for the
sale of the Registrable Securities in accordance with the intended method or
methods of distribution thereof, and use its best efforts to cause such
Registration Statement to become effective; the Company shall not file any
Registration Statement pursuant to Section 3 hereof or any amendment thereto or
any Prospectus or any supplement thereto (including such documents incorporated
by reference) to which the Holders or the underwriters, if any, shall reasonably
object in light of the requirements of the Securities Act or any other
applicable laws or regulations;

     (b) before filing a Registration Statement or Prospectus or any amendments
or supplements thereto (excluding documents to be incorporated by reference
therein, except in the case of the preparation of the initial Registration
Statement), the Company will within five days of filing, furnish to the Holders
and the underwriters, if any, copies of all such documents in substantially the
form proposed to be filed (including documents incorporated therein by
reference), to enable the Holders and the underwriters, if any, to review such
documents prior to the filing thereof, and the Company shall make such
reasonable changes thereto (including changes to, or the filing of amendments
reflecting such changes to, documents incorporated by reference) as may be
reasonably requested by the Holders and the managing underwriter or
underwriters, if any;

     (c) subject to the five-day review period required by paragraph (b) above,
prepare and file with the SEC such amendments and post-effective amendments to
the Registration Statement as may be necessary to keep the Registration
Statement continuously effective for a period of not less than 180 days or such
longer period as is required for the intended method of distribution, or such
shorter period which will terminate when all Registrable Securities covered

                                       5
<PAGE>

by such Registration Statement have been sold or withdrawn; cause the Prospectus
to be supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 under the Securities Act; and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable period
in accordance with the intended methods of disposition by the Holders thereof
set forth in such Registration Statement or supplement to the Prospectus;

     (d) notify the Holders and the managing underwriters, if any, promptly, and
(if requested by any such Person) confirm such advice in writing, (1) when the
Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to the Registration Statement or any post-effective
amendment, when the same has become effective, (2) of any request by the SEC for
amendments or supplements to the Registration Statement or the Prospectus or for
additional information, (3) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose, (4) if at any time the representations and
warranties of the Company contemplated by paragraph (o) below cease to be true
and correct, (5) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose, and (6) of the happening of any event which makes any statement made in
the Registration Statement, the Prospectus or any document incorporated therein
by reference untrue or which requires the making of any changes in the
Registration Statement, the Prospectus or any document incorporated therein by
reference in order to make the statements therein not misleading;

     (e) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of the Registration Statement at the earliest
possible moment;

     (f) as promptly as practicable after filing with the SEC of any document
which is incorporated by reference into the Registration Statement or the
Prospectus (after initial filing of the Registration Statement) provide copies
of such document to counsel to the Holders and to the managing underwriters;

     (g) furnish to the Holders and each managing underwriter, without charge,
at least one signed copy of the Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those incorporated
by reference) and a reasonable number of conformed copies of all such documents;

     (h) deliver to the Holders and the underwriters, if any, as many copies of
the Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons may reasonably request; the Company consents
to the use of the Prospectus or any amendment or supplement thereto by the
Holders and the underwriters, if any, in connection with the offering and sale
of the Registrable Securities covered by the Prospectus or any amendment or
supplement thereto;

     (i) prior to the date on which the Registration Statement is declared
effective, use its best efforts to register or qualify or cooperate with the
Holders and the underwriters, if any, and

                                       6
<PAGE>

their respective counsel in connection with the registration or qualification of
such Registrable Securities for offer and sale under the securities or blue sky
laws of such jurisdictions as any seller or underwriter reasonably requests in
writing and do any and all other acts or things necessary or advisable to enable
the disposition in such jurisdictions of the Registrable Securities covered by
the Registration Statement; provided that the Company will not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to general service of
process in any such jurisdiction where it is not then so subject;

     (j) cooperate with the Holders and the managing underwriters, if any, to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends; and
enable such Registrable Securities to be in such denominations and registered in
such names as the managing underwriters may request at least two business days
prior to any sale of Registrable Securities to the underwriters;

     (k) use its best efforts to cause the Registrable Securities covered by the
Registration Statement to be registered with or approved by such other
governmental agencies or authorities within the United States as may be
necessary to enable the seller or sellers thereof or the underwriters, if any,
to consummate the disposition of such Registrable Securities;

     (l) upon the occurrence of any event contemplated by paragraph (d)(6)
above, prepare a supplement or post-effective amendment to the Registration
Statement or the Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Securities, the Prospectus will not contain an
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein not misleading;

     (m) use its best efforts to cause all Registrable Securities covered by the
Registration Statement to be listed on each securities exchange on which similar
securities issued by the Company are then listed if requested by the Holders or
the managing underwriters, if any;

     (n) provide a transfer agent and registrar for all Registrable Securities;

     (o) enter into such agreements (including an underwriting agreement) and
take all such other actions in connection therewith as the Holders or the
managing underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities and in such
connection, whether or not an underwriting agreement is entered into and whether
or not the registration is an underwritten registration (1) make such
representations and warranties to the Holders and the underwriters, if any, in
form, substance and scope as are customarily made by issuers to underwriters in
primary underwritten offerings and confirm the accuracy of the same if and when
requested, and matters relating to the compliance of the Registration Statement
and the Prospectus with the Securities Act; (2) obtain opinions of counsel to
the Company and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managing underwriters)
addressed to the Holders and the underwriters, if any, covering the matters
customary in underwritten primary offerings and such other matters as may be
reasonably requested by the Holders and underwriters, if any; (3) obtain "cold
comfort" letters and updates thereof from the Company's independent certified
public accountants addressed to

                                       7
<PAGE>

the Holders and the underwriters, if any, such letters to be in customary form
and covering matters of the type customarily covered in "cold comfort" letters
by underwriters in connection with primary underwritten offerings; (4) if an
underwriting agreement is entered into, the same shall set forth in full the
indemnification provisions and procedures of Section 7 hereof with respect to
all parties to be indemnified pursuant to Section 7; and (5) the Company shall
deliver such documents and certificates as may be requested by the Holders and
the managing underwriters, if any, to evidence compliance with clause (1) above
and with any customary conditions contained in the underwriting agreement or
other agreement entered into by the Company. The above shall be done at each
closing under such underwriting or similar agreement or as and to the extent
required thereunder;

     (p) make available for inspection during normal business hours by the
Holders, any underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors and employees to supply all information reasonably requested
by any such seller, underwriter, attorney, accountant or agent in connection
with such registration statement; provided, that any records, information or
documents that are designated by the Company in writing as confidential shall be
kept confidential by such Persons;

     (q) otherwise use its best efforts to comply with all applicable rules and
regulations of the SEC, and make generally available to its security holders,
earnings statements satisfying the provisions of Section 11(a) of the Securities
Act, no later than 45 days after the end of any 12-month period (1) commencing
at the end of any fiscal quarter in which Registrable Securities are sold to
underwriters in a firm or best efforts underwriting offering, and (2) beginning
with the first month of the Company's first fiscal quarter commencing after the
effective date of the Registration Statement, which statements shall cover said
12-month periods.

     The Company may require the Holders to furnish to the Company such
information and documents regarding the distribution of such securities and the
seller as the Company may from time to time reasonably request in writing.

     The Holders each agree by acquisition of such Registrable Securities that,
upon receipt of any notice from the Company of the happening of any event of the
kind described in Section 5(d)(6) hereof, such Holder will forthwith discontinue
disposition of Registrable Securities until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 5(l) hereof,
or until it is advised in writing (the "Advice") by the Company that the use of
the Prospectus may be resumed, and has received copies of any additional or
supplemental filings which are incorporated by reference in the Prospectus, and,
if so directed by the Company, each Holder will, or will request the
underwriters to, deliver to the Company (at the Company's expense) all copies,
other than permanent file copies then in such Holder's possession, of the
Prospectus covering such Registrable Securities current at the time of receipt
of such notice. If the Company shall give such notice, the time periods
mentioned in Section 5(c) hereof shall be extended by the number of days during
the period from and including the date of the giving of such notice pursuant to
Section 5(d)(6) to and including the date when the Holders shall have received
the copies of the supplemented or amended prospectus contemplated by Section
5(l) hereof or the Advice.

                                       8
<PAGE>

6.   Registration Expenses; Additional Obligations of the Company.

     In connection with the registration of Registrable Securities in accordance
with Sections 3(a) and 4(a) above, the Company agrees to pay all expenses in
connection with the registration of the Registrable Securities under the
Securities Act; provided, however, that (i) each Holder will pay all
underwriting commissions and transfer taxes attributable to the securities to be
sold by such Holder and (ii) the Company will be responsible for the reasonable
legal fees and expenses of a single counsel to all the Holders, such counsel to
be selected by Palisade.

7.   Indemnification

     (a) Indemnification by Company. The Company will indemnify and hold
harmless, to the full extent permitted by law, each Holder, its officers and
directors, their Agents and each Person who controls each such Holder (within
the meaning of the Securities Act) against all losses, claims, damages,
liabilities (or actions in respect thereto) and expenses to which any such
Person may be subject, under the Securities Act or otherwise, and reimburse all
such Persons for any legal or other expenses incurred with investigating or
defending against any such losses, claims, damages or liabilities, insofar as
such losses, claims, damages or liabilities arise out of or are based upon any
untrue or alleged untrue statement of a material fact contained in a
Registration Statement, Prospectus or preliminary prospectus or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
the same arise out of or are based upon an untrue statement of a material fact
or omission of a material fact required to be stated therein or necessary to
make the statements therein not misleading, which statement or omission is made
therein in reliance upon and in conformity with information furnished in writing
to the Company by such Holder, expressly for use therein. The Company will also
indemnify underwriters, selling brokers, dealer managers and similar securities
industry professionals participating in the distribution, their officers and
directors and each Person who controls such Persons (within the meaning of the
Securities Act) to the same extent as provided above with respect to the
indemnification of each Holder of Registrable Securities.

     (b) Indemnification by Holders. Each Holder will, severally and not
jointly, indemnify and hold harmless, to the full extent permitted by law, the
Company, its directors and officers and each Person who controls the Company
(within the meaning of the Securities Act) against any losses, claims, damages,
liabilities (or actions in respect thereto) and expenses to which any such
Person may be subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities arise out of or are based upon any untrue
or alleged untrue statement of a material fact contained in a Registration
Statement or Prospectus or preliminary prospectus or any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, to the extent, but only if and to the
extent, that such untrue or alleged untrue statement or omission or alleged
omission is made therein in reliance upon and in conformity with the information
furnished in writing by such Holder specifically for inclusion therein. In no
event shall the liability of a Holder hereunder be greater in amount than the
dollar amount of the proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation. The
Company shall be entitled to receive indemnities from underwriters, selling
brokers, dealer managers and similar

                                       9
<PAGE>

securities industry professionals participating in the distribution, to the same
extent as provided above with respect to information so furnished in writing by
such Persons.

     (c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder will (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) unless in
such indemnified party's reasonable judgment a conflict of interest may exist
between such indemnified and indemnifying parties with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party and in that case the
indemnified party shall have the right to participate in the conduct of such
defense provided that it will pay for the fees of its own counsel. Whether or
not such defense is assumed by the indemnifying party, the indemnifying party
will not be subject to any liability for any settlement made without its consent
(but such consent will not be unreasonably withheld). No indemnifying party will
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving of the claimant or plaintiff
to such indemnified party of a release from all liability in respect to such
claim or litigation. An indemnifying party who is not entitled to, or elects not
to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim, in which event the indemnifying party shall be obligated to pay the fees
and expenses of such additional counsel or counsels.

8.   Miscellaneous

     (a) Remedies. Without limiting the rights of the Holders to pursue all
other legal and equitable remedies available for any breach of the provisions of
this Agreement, including recovery of damages, each will be entitled to specific
performance of their rights under this Agreement. The Company expressly agrees
that monetary damages would not be adequate compensation for any loss incurred
by the Holders by reason of a breach by it of the provisions of this Agreement
and that the Holders would sustain irreparable harm, and therefore further
agrees that they shall be entitled to specific performance to prevent any such
breach or any continuing breach hereof and to waive the defense in any action
for specific performance that a remedy at law would be adequate.

     (b) No Inconsistent Agreements. The Company will not on or after the date
of this Agreement enter into any agreement with respect to its securities which
is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof.

     (c) Notices. All notices, requests, demands and other communications
provided for by this Agreement shall be in writing (including telecopier or
similar writing) and shall be deemed to have been given at the time when mailed
in any general or branch office of the United States Postal Service, enclosed in
a registered or certified postpaid envelope, or sent by Federal Express or other
similar overnight courier service, addressed to the address of the parties
stated below or to such changed address as such party may have fixed by notice
or, if given by telecopier, when such telecopy is transmitted and the
appropriate answerback is received.

                                       10
<PAGE>

          (i)  If to the Company:

               OptiCare Health Systems, Inc.
               87 Grandview Avenue
               Waterbury, Connecticut  06708
                        Attention:

          (ii) If to a Holder to the address the Company has on record for such
               Holder.

     (d) Successors and Assigns. This Agreement is solely for the benefit of the
parties and their respective successors and assigns. Nothing herein shall be
construed to provide any rights to any other entity or individual.

     (e) Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.

     (f) Headings. Section headings are for convenience only and do not control
or affect the meaning or interpretation of any terms or provisions of this
Agreement.

     (g) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York governing contracts to be made
and performed therein without giving effect to principles of conflicts of law,
and, with respect to any dispute arising out of this Agreement, each party
hereby consents to the exclusive jurisdiction of the courts sitting in such
State.

     (h) Severability. Should any part, term, condition or provision hereof or
the application thereof be declared illegal, invalid or otherwise unenforceable
or in conflict with any other law by a court of competent jurisdiction, the
validity of the remaining parts, terms, conditions or provisions of this
Agreement shall not be affected thereby, and the illegal, invalid or
unenforceable portions of this Agreement shall be and hereby are redrafted to
conform with applicable law, while leaving the remaining portions of this
Agreement intact, except to the extent necessary to conform to the redrafted
portions hereof.

     (i) Entire Agreement. This Agreement sets forth the entire agreement and
understanding between the parties and supersedes all proposals, commitments,
writings, negotiations, discussions, agreements and understandings, oral or
written, of every kind and nature between them concerning the subject matter
hereof. This Agreement may not be amended or otherwise modified except in a
writing signed by both parties hereto. No discharge of the terms hereof shall be
deemed valid unless by full performance by the parties or by a writing signed by
the parties. A waiver by any party of any breach or violation of any this
Agreement shall not be deemed or construed as a waiver of any other breach or
violation hereof.

     (j) Attorneys' Fees. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the successful

                                       11
<PAGE>

party shall be entitled to recover reasonable attorneys' fees in addition to any
other available remedy.

     (k) Basic Limitations. Notwithstanding the provisions of this Agreement,
the Company shall not be obligated to maintain the effectiveness of the
Registration Statement pursuant to this Agreement, and the Holders shall not be
entitled to sell Registrable Securities pursuant to the Registration Statement,
as applicable:

     (i)  if the Company is acquired and its Common Stock ceases to be publicly
          traded and in such acquisition of the Company, the Holders receive, in
          exchange for the Registrable Securities then held by them, cash and/or
          securities that may be traded without restriction on transfer imposed
          by the Securities Act, other than (A) the restrictions on transfer
          under paragraph (g) of Rule 144 promulgated under the Securities Act,
          as such Rule is in effect on the Effective Date of this Agreement or
          (B) the restrictions on transfer under paragraph (d)(3) of Rule 145
          promulgated under the Securities Act, as such Rule is in effect on the
          date hereof; or

     (ii) in any particular jurisdiction in which the Company would be required
          to qualify to do business or to execute a general consent to service
          of process in effecting such registration, qualification or
          compliance, unless the Company is already subject to service of
          process in such jurisdiction.

     (l) Black-Out Rights. Notwithstanding the provisions of this Agreement
above, if the Company shall furnish to the Holders a certificate signed by the
Chief Financial Officer or any other executive officer of the Company stating
that, in the good faith judgment of the Board of Directors of the Company, as
evidenced by a resolution of the Board of Directors, it would be detrimental to
the Company to any significant degree for a sale of Registrable Securities
pursuant to the Registration Statement to take place at such time (a "Blackout
Certificate"), due to the existence of a material development or potential
material development involving the Company which the Company would be obligated
to disclose in the prospectus supplement to the Registration Statement, which
disclosure could reasonably be expected to have a material adverse effect on the
Company or a party with whom the Company is then in negotiations or
discussions), then, for a period of up to thirty (30) calendar days (a "Blackout
Period") after the Company gives such Blackout Certificate to the Holders (with
the exact length of such Blackout Period to be determined by the Company in its
sole discretion so long as such Blackout Period does not exceed thirty (30)
calendar days): (i) the Company shall have the right to defer, delay and
postpone any sale of Registrable Securities under the Registration Statement and
the preparation and filing of any supplement or amendment to the registration
statement (including without limitation the filing of any 1934 Act report to be
incorporated by reference into such registration statement) for a Registration
Statement that the Company might otherwise be required to prepare, file and/or
cause to become effective under this Agreement; and (ii) the Holders shall not
be entitled to sell any Registrable Securities pursuant to the Registration
Statement. Notwithstanding the foregoing, the Company shall not exercise its
rights to defer, delay or postpone the sale of Registerable Securities pursuant
to this Section 8(l) more than once in any eighteen (18) month period.

                                       12
<PAGE>

     (m) Furnish Information. It shall be a condition precedent to the
obligations of the Company to maintain the effectiveness of the Registration
Statement or to prepare and file any amendment or supplement to the Registration
Statement or the prospectus contained therein, that the selling Holders will
furnish to the Company, upon the Company's request, such information regarding
themselves, the Registrable Securities held by them, and the intended method of
disposition of such Registrable Securities as shall be reasonably required to
timely effect the registration of their Registrable Securities.

     (n) Delay of Registration. No Holder will have any right to obtain or seek
an injunction restraining or otherwise delaying any registration effected
pursuant to this Agreement as the result of any controversy that might arise
with respect to the interpretation or implementation of this Agreement.

     (o) Duration and Termination of The Company's Obligations. The Company will
have no obligations pursuant to this Agreement or other request or requests for
registration (or inclusion in a registration) made by any Holder or to maintain
or continue to keep effective any registration or registration statement
pursuant hereto: (a) if legal counsel to the Company shall deliver a written
opinion to the Company, its transfer agent and the Holders, in form and
substance reasonably acceptable to the Company and the Holders, to the effect
(concurred to by counsel to the Holders (if the Holders have requested their
counsel to review such opinion), such concurrence not to be unreasonably
withheld or delayed) that all the Registrable Securities then held by all
Holders may be immediately resold by the Holders without registration under the
Securities Act pursuant to the provisions of Rule 144(k) promulgated under the
Securities Act, or otherwise; (b) if the Company or its legal counsel shall have
received a "no-action" letter from the SEC to the effect (concurred with by
counsel to the Holders (if the Holders have requested their counsel to review
such "no-action" letter), such concurrence not to be unreasonably withheld or
delayed) that all the Registrable Securities then outstanding may be resold by
the Holders without registration under the Securities Act pursuant to the
provisions of Rule 144(k) promulgated under the Securities Act or otherwise,
and/or that the SEC would take no enforcement action against such Holder for so
effectuating such sales; or (c) if all Registrable Securities originally held by
such Holder on the date of this Agreement have been registered and sold pursuant
to registrations effected pursuant to this Agreement.

                                       13
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

                                THE COMPANY:

                                OPTICARE HEALTH SYSTEMS, INC.

                                By:____________________________
                                      Name:
                                      Title:

                                THE HOLDERS:

                                PALISADE CONCENTRATED EQUITY PARTNERSHIP, L.P.

                                By:____________________________
                                      Name:
                                      Title:

                                CAPITALSOURCE FINANCE, LLC

                                By:____________________________
                                      Name:
                                      Title:

                                -------------------------------
                                Linda Yimoyines

                                       14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00033-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00033-of-00352.parquet"}]]